A stock had returns of 6 percent, -22 percent, 18percent, 12 percent, and -2 percent over...

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A stock had returns of 6 percent, -22 percent, 18percent, 12 percent, and -2 percent over...

A stock had returns of 6 percent, -22 percent, 18percent, 12 percent, and -2 percent over the past five years. What is the standard deviation of these returns?

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Answer 1

Answer #1

Average return=Total return/Total time period

=(6-22+18+12-2)/5=2.4%

Return	(Return-Average Return)^2
6	(6-2.4)^2=12.96
-22	(-22-2.4)^2=595.36
18	(18-2.4)^2=243.36
12	(12-2.4)^2=92.16
-2	(-2-2.4)^2=19.36
	Total=963.2%

Standard deviation=[Total (Return-Average Return)^2/(Time period-1)]^(1/2)

=[963.2/(5-1)]^(1/2)

=[963.2/4]^(1/2)

=15.52%(Approx).

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Answer 2

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