The standard deviation of the past five monthly returns for K and Company are 2.28 percent, 2.64 percent, −1.05 percent, 4.25 percent, and 9.25 percent. What is the standard deviation?
A) 1.45 percent
B) 1.62 percent
C) 3.47 percent
D) 3.76 percent

Question

Quizplus · Accepted Answer

The standard deviation is a measure of the dispersion of a set of data. It is calculated by taking the square root of the variance. The variance is calculated by taking the average of the squared differences between each data point and the mean. In this case, the mean of the five monthly returns is 2.83 percent. The variance is calculated as follows:```Variance = [(2.28 - 2.83)^2 + (2.64 - 2.83)^2 + (-1.05 - 2.83)^2 + (4.25 - 2.83)^2 + (9.25 - 2.83)^2] / 4 = 13.76```The standard deviation is calculated as follows:```Standard deviation = sqrt(13.76) = 3.76 percent```Therefore, the standard deviation of the past five monthly returns for K and Company is 3.76 percent.

The Standard Deviation of the Past Five Monthly Returns for K