You have the following historical annual total returns on Terlingua Oil & Gas Exploration:
Year | Annual total return (%) |
2001 | 0% |
2002 | -10% |
2003 | 19% |
2004 | 12% |
2005 | 13% |
2006 | 9% |
2007 | -4% |
2008 | 5% |
2009 | 2% |
2010 | 4% |
Calculate the sample standard deviation of annual return.
Calculating the Sample Standard Deviation of annual Return:-
Year | Stock (R) (%) | [(R)-E(R)] | [(R)-E(R)]^2 |
2001 | 0.00 | -5.0000 | 25.00 |
2002 | -10.00 | -15.0000 | 225.00 |
2003 | 19.00 | 14.0000 | 196.00 |
2004 | 12.00 | 7.0000 | 49.00 |
2005 | 13.00 | 8.0000 | 64.00 |
2006 | 9.00 | 4.0000 | 16.00 |
2007 | -4.00 | -9.0000 | 81.00 |
2008 | 5.00 | 0.0000 | 0.00 |
2009 | 2.00 | -3.0000 | 9.00 |
2010 | 4.00 | -1.0000 | 1.00 |
50.00 | 666.00 |
- Expected Annual Return, [E(R)]
= 5%
- Sample Standard Deviation
= 8.60%
So,
the sample standard deviation of annual return is
8.60%
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