You have been following a stock for 3 months and the following is its past return...

Question

Question

Answer 1

Answer #1

Standard deviation = (R - R)2/N

Where R = return of the stock

R' = average return

N = time period

R year 1 2 12 13 R-R (R-R)^2 1.6666672.777778 2.666667 7.111111 -4.33333 18.77778 28.66667 1 Total 31

From the above data

Average return(R') = Total return / number of years = 31 / 3 = 10.33333%

Standard deviation = 28.66667/3

= 3.0912% but the answer required to be in decimals so standard deviation = 0.030912

Answer 2

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