The following table presents annual returns for B&G stock over the past four years:
Year | 1 | 2 | 3 | 4 |
Return | 7.55% | 13.48% | 10.15% | 1.48% |
What is the standard deviation of B&G's returns?
Ans 4.39%
YEAR | RETURN | (X -Average Return of X)^2 |
1 | 7.55 | 0.378225 |
2 | 13.48 | 28.249225 |
3 | 10.15 | 3.940225 |
4 | 1.48 | 44.689225 |
Total | 32.66 | 77.256900 |
Average Return = | Total Return / NO of years | |
32.66 / 4 | ||
8.17 | ||
Variance = | sum of (X -Average Return of X)^2 / no of years | |
77.256900 / 4 | ||
19.3142 | ||
Standard Deviation = | Square root of Variance | |
Square root of 19.3142 | ||
4.39 |
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