The monthly standard deviation for a stock is 4.2%.What is the 6 month standard deviation for the security?
A) 4.2 %
B) 10.3 %
C) 25.2 %
D) 50.4 %

Question

Quizplus · Accepted Answer

The formula to calculate the annualized standard deviation is: monthly standard deviation*sqrt(12). 
Therefore, the 6 month standard deviation is calculated as follows: 
6 month standard deviation = 4.2% * sqrt(6) = 10.3%. 
Thus, the correct answer is (B) 10.3 %.

The Monthly Standard Deviation for a Stock Is 4