Reference no: EM131624316

Question: The table below shows the annual change in the average U.S. home price from 2005 to 2014 according to the S&P/Case-Shiller Index. Calculate the average annual return and its standard deviation. Compare this to the average return and standard deviation for Target Corporation and American Eagle Outfitters, Inc., shown in Table. In terms of average return and standard deviation, how does residential real estate compare as an investment relative to those two common stocks?

Year                % Change

2005                  15.5%

2006                   0.7 %

2007                  -9.0%

2008                 -18.6%

2009                  -3.1%

2010                  -2.4%

2011                  -4.1%

2012                   6.9%

2013                 13.4%

2014                  4.5%