Question
In: Finance
What is the standard deviation of the returns?
You are analyzing the returns of a mutual fund portfolio for the past 5 years.
|
Year |
Return |
|
2014 |
-30% |
|
2015 |
-25% |
|
2016 |
40% |
|
2017 |
-10% |
|
2018 |
15% |
What is the standard deviation of the returns?
Solutions
Expert Solution
Standard devaition of the returns
Average rate of return =-30%-25%+40%-10%+15%
=-10%
Deviation = rate of return - average rate of return Deviation square
-30-10 =-40 1600
-25-10 =-35 1225
40-10 = 30 900
-10-10 =- 20 400
15-10 = 5 25
Total ∑ 4150
S.d =√∑deviation square
=√4150
=64.42
jeff jeffy answered 2 years agoRelated Solutions
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