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 ago
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