Question
93. Calculate the variance of an investment with five year returns of 10%, 6%, 4%, 2%...
93. Calculate the variance of an investment with five year returns of 10%, 6%, 4%, 2% and (10%).
Homework Answers
Answer #1
where N = no. of returns
Mean of Returns = ( 10 + 6 + 4 + 2 - 10 ) / 5 = 2.4 %
|
Sum of All ( Return - Mean) 2 = 57.76 + 12.96 + 2.56 + 0.16 + 153.76 = 227.2
Sum of All ( Return - Mean) 2 / N = 227.2 / 5 = 45.44
Square Root of [ Sum of All ( Return - Mean) 2 / N ] = ( 45.44 ) 1/2 = 6.74 %
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