Question

Module Three Homework Template - Excel Data Review View Cut = = Tell me what you want to do Wrap Test General Merge & Center - $ % 48.99 File Home Insert Page Layout Formulas Arial 10 A* C Copy Paste BIU Format Painter . S.A. Clipboard Font K P6-19 D E 1 P6-19 17 points 1 D D Conditional Format as Cell Formatting Table Styles Styles Alignment Number AI F G H I J K L M N No credit will be given if work is not shown. Highlight or bold your answers. O 3 Here are the nominal returns on stocks, bonds, and bills for the 1920s and 1930s. For each decade, calculate the standard deviation of returns for each 4 asset class. (Show your work. Label %. One decimal place required.) How do those figures compare with more recent numbers for stocks 5 presented in Table 6.3 and the long-run figures for all three asset types in Table 6.47 Nominal Returns (%) on Stocks, Bonds, and Bills 1920s 1930s Stocks Bonds Bills StocksBonds Bulls -17958762834724 116 127 70 -439 5 3 1.1 30. 6 35 4.7 -9.8 16.8 305752576 -0.1 0.3 270 | 64 4.1 10.0 02 44.0 95 32.3 283 alacca 38.7 28

Answer 1

Standard Deviation= Standard Deviation is a technique to measure risk. Standard Deviation is calculated on the basis of variation from arithmetic mean. It is pronounced as sigma.
Formula
Standard Deviation=		√Given return-average return/n
Calculation of Standard Deviation
Step-1 Calculate average return
Step-2 Calculate deviation of given return i.e. Given return-Average Return
Step-3 Square of deviation
S.No.	Given Return						Deviation=Given retun-Average Return						Square of Deviation
	1920			1930			1920			1930			1920			1930
	Stock	Bonds	Bills	Stock	Bonds	Bills	Stock	Bonds	Bills	Stock	Bonds	Bills	Stock	Bonds	Bills	Stock	Bonds	Bills
A	B	C	D	E	F	G	H	I	J	K	L	M	N	O	P	Q	R	S
1	-17.90	5.80	7.60	-28.30	4.70	2.40	-32.84	-0.20	2.86	-33.58	-0.28	1.83	1,078.47	0.04	8.18	1,127.62	0.08	3.35
2	11.60	12.70	7.00	-43.90	-5.30	1.10	-3.34	6.7	2.26	-49.18	-10.28	0.53	11.16	44.89	5.11	2,418.67	105.68	0.28
3	30.60	3.50	4.70	-9.80	16.80	1.00	15.66	-2.5	-0.04	-15.08	11.82	0.43	245.24	6.25	0.00	227.41	139.71	0.18
4	3.00	5.70	5.20	57.60	-0.10	0.30	-11.94	-0.3	0.46	52.32	-5.08	-0.27	142.56	0.09	0.21	2,737.38	25.81	0.07
5	27.00	6.40	4.10	4.40	10.00	0.20	12.06	0.4	-0.64	-0.88	5.02	-0.37	145.44	0.16	0.41	0.77	25.20	0.14
6	28.30	5.70	4.10	44.00	5.00	0.20	13.36	-0.3	-0.64	38.72	0.02	-0.37	178.49	0.09	0.41	1,499.24	0.00	0.14
7	9.50	7.80	3.30	32.30	7.50	0.20	-5.44	1.8	-1.44	27.02	2.52	-0.37	29.59	3.24	2.07	730.08	6.35	0.14
8	33.10	8.90	3.10	-34.60	0.20	0.30	18.16	2.9	-1.64	-39.88	-4.78	-0.27	329.79	8.41	2.69	1,590.41	22.85	0.07
9	38.70	0.10	3.60	28.20	5.50	0.00	23.76	-5.9	-1.14	22.92	0.52	-0.57	564.54	34.81	1.30	525.33	0.27	0.32
10	-14.50	3.40	4.70	2.90	5.50	0.00	-29.44	-2.6	-0.04	-2.38	0.52	-0.57	866.71	6.76	0.00	5.66	0.27	0.32
Total	149.40	60.00	47.40	52.80	49.80	5.70	0.00	0.00	0.00	0.00	0.00	0.00	3,591.98	104.74	20.38	10,862.58	326.22	5.02
N=Number of Data
n= 10
Average Return= Sum of Given Return/n
Particulars		Average Return	Square of Deviation	N	Square of Deviation/N	√Square of Deviation/n
A	B	C	D=Calculated Above	E= No of data	F=D^2	G=√F
1920	Stock	14.94	3,591.98	10	359.20	18.95
	Bonds	6	104.74	10	10.47	3.24
	Bills	4.74	20.38	10	2.04	1.43
1930	Stock	5.28	10,862.58	10	1,086.26	32.96
	Bonds	4.98	326.22	10	32.62	5.71
	Bills	0.57	5.02	10	0.50	0.71