Question

Below are returns on the stock A and S&P500 index. All numbers are in decimals (-0.0222 is equivalent to -2.22%).

A	S_P500
-0.0222	0.0032
-0.0048	-0.0058
0.1333	0.0434
0.0765	0.1081
-0.0161	-0.0121
0.1250	0.1400
0.0145	0.0368
-0.0475	-0.0454
0.0430	0.0577
-0.0260	-0.1374
0.0071	0.0064
0.0249	0.0186
0.0850	0.0215
-0.0624	-0.0752
0.0933	0.0365
0.0456	0.0528
-0.0632	-0.0131
0.0450	0.0009
0.0200	0.0017
0.0280	0.0985

What is the sample standard deviation of the S&P500 returns?

Please write an answer in decimals. For example, 12.34% would be 0.1234.
Also, round your answer to the fourth decimal.

Answer 1

Standard deviation of S&P Returns

0.0623

WORKINGS

The standard deviation is computed using the STDEV function in excel as below

Book1 Excel 012, Sign in 1234567890123456789 AutoSave Insert Draw Page Layout Formulas Data Review View Help Tell me what you want to do Share File Home Wrap Text Arial Number Conditional Fornat as Cell Insert Delete Fornat Formatting Table Styles Filter Select Alignment Number Stles Cells Editing Clipboard Font xSTDEV(B2:B21) S P500 STDEVB2:B21) 20.0222 0.00 0.0058 0.0434 0.1081 0.0121 0.14 0.0368 0.0454 0.0577 0.1374 0.0064 0.0186 0.0215 0.0752 0.0365 0.0528 0.0131 |0.0765 11-0026 1 51-0.0624 20 0.02 21 0.028 0.0017 0.0985 Sheet1 Sheet2 Sheet3 Ready +100% ENG 10:55 AM