Calculate the standard deviation of the following returns. Year Return 1 0.18 2 0 3 -0.05...

Calculate the standard deviation of the following returns.

Year Return

1 0.18

2 0

3 -0.05

4 0.2

5 -0.17

Enter the answer with 4 decimals, e.g. 0.1234

Expert Solution

Standard Deviation

σ =√Σ(X-X̅)^2/n

Where,
σ = standard deviation
X= Return
X̅= Expected Return
n= number of observations

Sr. NO	X	X - X̅ (i.e.X--0.4)	(X-X̅)^2
1	18.00	18.40	338.56
2	0.00	0.40	0.16
3	-5.00	-4.60	21.16
4	2.00	2.40	5.76
5	-17.00	-16.60	275.56
Total	-2.00		641.20

X̅=Σ X/n =-2/5=	-0.4

Σ(X-X̅)^2=641.2

128.24
σ =√641.2/5
σ=11.32%

Standard Deviation : 0.1132

jeff jeffy answered 2 years ago

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