You have calculated the following holding period returns for an individual stock:
Periods Return
Month 1 7%
Month 2 14%
Month 3 -1%
What is the stock's standard deviation? Assume we don't know the probabilities about the future.
* Hint: Please calculate E(R) first and calculate standard deviation accordingly.
Please round your answer to the fourth decimal. If your answer is 1.11%, you should input "0.0111".
X | (X - X̄) | (X - X̄)² |
0.07 | 0.00 | 0.00 |
0.14 | 0.07 | 0.01 |
-0.01 | -0.08 | 0.01 |
mean = ΣX/n = 0.2/3=
0.07
sample std dev = √ [ Σ(X - X̄)²/(n-1)] =
√(0.0113/2)= 0.0751
Please let me know in case of any doubt.
Thanks in advance!
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