Question

The past five monthly returns for Kohl's are 3.72 percent, 4.07 percent, -1.86 percent, 9.34 percent, and -2.74 percent. Compute the standard deviation of Kohls' monthly returns. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Return, 3.72% Retum, 4.07% 1 9602 Returns Return Returns 9.34% -2.74% Complete the following analysis. Do not hard code values in your calculations. Standard deviation 19 20 ... Sheeti ... READY -- + Attemntisl

The past five monthly returns for Kohl's are 3.72 percent, 4.07 percent, -1.86 percent, 9.34 percent, and -2.74 percent. Compute the standard deviation of Kohls' monthly returns. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Return, 3.72% Retum, 4.07% 1 9602 Returns Return Returns 9.34% -2.74% Complete the following analysis. Do not hard code values in your calculations. Standard deviation 19 20 ... Sheeti ... READY -- + Attemntisl

Answer 1

$Variance = ^{\frac{\sum (Return - Exp Return)^{2}}{n-1}}$

$Standard Deviation =Variance ^{1/2}$

With the use of this formula we calculate the answer

Solution :-
Month	Return	Return - ER	(Return - ER)2
1	3.72%	1.21%	0.015%
2	4.07%	1.56%	0.024%
3	-1.86%	-4.37%	0.191%
4	9.34%	6.83%	0.467%
5	-2.74%	-5.25%	0.275%
	12.53%		0.972%
Expected Return   =		3.72% + 4.07% + ( - 1.86%) + 9.34% + (-2.74%) / 5
		=	12.53% / 5
		=	2.51%
Variance		=	(Return - ER)2 / (n-1)
			0.972% / (5 - 1)
			0.243%
Now SD =		Sqrt(Var)	Sqrt(0.243%)	4.93%

Therefore Standard Deviation is 4.93%

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