The Dow Jones Industrial Average had the following annual returns: Year Return 2019 22.3% 2020 7.3% 2021 19% 2022 -8.7% Using just these last 4 years of data, what is the expected return for the Dow Jones? What is the standard deviation of the returns? Please show and explain your work.

Entrepreneurial Finance
6th Edition
ISBN:9781337635653
Author:Leach
Publisher:Leach
Chapter10: Valuing Early-stage Ventures
Section: Chapter Questions
Problem 16DQ
Question
The Dow Jones Industrial Average had the following annual returns:
Year
Return
2019 22.3%
2020
7.3%
2021
19%
2022
-8.7%
Using just these last 4 years of data, what is the expected return for the Dow Jones?
What is the standard deviation of the returns? Please show and explain your work.
Transcribed Image Text:The Dow Jones Industrial Average had the following annual returns: Year Return 2019 22.3% 2020 7.3% 2021 19% 2022 -8.7% Using just these last 4 years of data, what is the expected return for the Dow Jones? What is the standard deviation of the returns? Please show and explain your work.
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