Consider a risky asset with the following string of rates of returns in the previous 5 years. 5 years ago it returned -10%, 4 years ago -20%, 3 years ago 30%, 2 years ago 0%, and 1 year ago 5%. In addition, there is a safe asset with a constant rate of return of 1% in each year. For the risky asset please compute and provide your computations:
a. Arithmetic average of returns and returns' standard deviation (10 points).
b. Geometric average of returns (5 points).
c. Excess returns in each year and risk premium (10 points).
d. Sharpe ratio