An asset had annual returns of 13, 10, −14, 3, and 36 percent, respectively, for the past five years. What is the standard deviation of these returns?
A)8.96%
B)16.05%
C)17.92%
D)18.09%
E)20.03%

Question

Quizplus · Accepted Answer

To calculate the standard deviation, first find the average return: (13 + 10 - 14 + 3 + 36) / 5 = 9.6%. Then, calculate the variance by finding the squared deviations from the mean, averaging them, and taking the square root: sqrt(((13-9.6)^2 + (10-9.6)^2 + (-14-9.6)^2 + (3-9.6)^2 + (36-9.6)^2) / 5) = 18.09%.

An Asset Had Annual Returns of 13, 10, −14, 3