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%

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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