The standard deviation for a set of stock returns can be calculated as the: A. positive...

The standard deviation for a set of stock returns can be calculated as the:

A. positive square root of the average return

B. average squared difference between the actual and the average return

C. positive square root of the variance

D. variance squared

Solutions

Expert Solution

Standard deviation is a statistic that measures the spread of a dataset compared to its mean and is calculated as the square root of the variance. The standard deviation is calculated as the square root of variance by finding each data point's deviation as compared to the mean

So option C is correct.

jeff jeffy answered 2 years ago

Next > < Previous

Related Solutions

Is it possible that a security with a positive standard deviation of returns could have a...

Is it possible that a security with a positive standard deviation of returns could have a beta of zero (excluding T-bills)? Explain. From the CAPM, what is the expected return on such an asset? Is it possible that a security with a positive standard deviation could have an expected return from the CAPM that is less than the risk-free rate? If so, what would its beta be? Would anyone be willing to purchase such a stock? Discuss.

Q1: Calculate the standard deviation of returns on a stock that had the following returns in...

Q1: Calculate the standard deviation of returns on a stock that had the following returns in the past three years: Year Return 1 9% 2 -12% 3 18% Q: A company has a target capital structure of 55% common stock, 10% preferred stock, and 35% debt. Its cost of equity is 13%, the cost of preferred stock is 7%, and the cost of debt is 8%. The relevant tax rate is 30%. What is the company’s Weighted Average Cost...

3. Take the mean and standard deviation of data set A calculated in problem 1 and...

3. Take the mean and standard deviation of data set A calculated in problem 1 and assume that they are population parameters (μ and σ) known for the variable fish length in a population of rainbow trouts in the Coldwater River. Imagine that data set B is a sample obtained from a different population in Red River (Chapter 6 problem!). a) Conduct a hypothesis test to see if the mean fish length in the Red River population is different from...

Take the mean and standard deviation of data set A calculated in problem 1 and assume...

Take the mean and standard deviation of data set A calculated in problem 1 and assume that they are population parameters (μ and σ) known for the variable fish length in a population of rainbow trouts in the Coldwater River. Imagine that data set B is a sample obtained from a different population in Red River (Chapter 6 problem!). Conduct a hypothesis test to see if the mean fish length in the Red River population is different from the population...

Calculate the standard deviation of the following set of measured values: 3.15,3.21,3.18,3.30,3.25,3.13,3.24,3.41,3.13,3.42,3.19 I calculated it but...

Calculate the standard deviation of the following set of measured values: 3.15,3.21,3.18,3.30,3.25,3.13,3.24,3.41,3.13,3.42,3.19 I calculated it but my answer was incorrect. Can you please do this problem and show the work step by step. I need to see where I went wrong. Thank you so much.

3. Take the mean and standard deviation of data set A calculated in problem 1 and...

3. Take the mean and standard deviation of data set A calculated in problem 1 and assume that they are population parameters (μ and σ) known for the variable fish length in a population of rainbow trouts in the Coldwater River. Imagine that data set B is a sample obtained from a different population in Red River (Chapter 6 problem!). Conduct a hypothesis test to see if the mean fish length in the Red River population is different from the...

Suppose you calculated the mean, median, mode, and sample standard deviation of a data set. The...

Suppose you calculated the mean, median, mode, and sample standard deviation of a data set. The results are shown below. Mean: 44 Median: 31 Mode: 46 Sample Standard Deviation: 2 If each number in the data set was decreased by 4 units, what would be the new values of these statistics? Fill in your results below. New Mean: New Median: New Mode: New Sample Standard Deviation:

A share of WTB stock sells for $50 and has a standard deviation of returns of...

A share of WTB stock sells for $50 and has a standard deviation of returns of 20 percent per year. The current risk free rate is 5% and a call option with a strike price of $50 expires in 3 months. a. Using the Black-Scholes formula, what is the value of the call option? b. If you found this option describe above selling for $1.50 more then what you calculated in part (a) above, would you want to buy it...

Consider a stock with a current value of $76 and a standard deviation of returns equal...

Consider a stock with a current value of $76 and a standard deviation of returns equal to 30%. Suppose there is a call option on this stock with a maturity of 6 months and a strike price of $70. The risk-free rate is 3%. What is the value of this option? If the stock price increases by $1, what is the change in the option value? Provide some intuition to this change (e.g., is it a high or a low...

Stock A has an expected return of 5%, and a standard deviation of returns of 10%....

Stock A has an expected return of 5%, and a standard deviation of returns of 10%. Stock B has an expected return of 15% and a standard deviation of returns of 20%. The correlation between the two stocks returns in 0.90. The standard deviation of an equally-weighted portfolio comprised of the two stocks will be: more than 15% None of the answers listed here. 15% less than 15%

Subjects