Question
The return on your portfolio over the last 5 years were -5%, 20%, 0%, 10% and...
The return on your portfolio over the last 5 years were -5%, 20%, 0%, 10% and 5%. What is the standard deviation of your return?
a) 2.74%
b) 5.21%
c)8.60%
d) 10.12%
Homework Answers
Answer #1
Ans: Option C , 8.6 %
Count N = 5
Sum of all return = -5+20+0+10+5 = 30
Mean = 
( Sum of all return / N ) =30 / 5
= 6
Standard deviation 
= 
=
= 
= 8.6023 %
= 8.60 %
Standard deviation = 8.6 %
Note 1:
| Year(i) | Return(x) | (xi-µ) | (xi-µ) Calculation | (xi-µ)^2 |
| 1 | -5 | -11 | (-5-6) | 121 |
| 2 | 20 | 14 | (20-6) | 196 |
| 3 | 0 | -6 | (0-6) | 36 |
| 4 | 10 | 4 | (10-6) | 16 |
| 5 | 5 | -1 | (5-6) | 1 |
= 121+196+36+16+1 = 370
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V1/5 * 370)
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