Stock A,has returns of 10%,20%,30%,and 40%,over the last four years.What is the stock's standard deviation?
A)166.67%
B)12.91%
C)4.08%
D)2.15%

Question

Quizplus · Accepted Answer

To calculate the standard deviation of the given returns, we first calculate the average return:
(10% + 20% + 30% + 40%) / 4 = 25%
Next, we calculate the variance by taking the difference between each return and the average return, squaring it, and then taking the average of those squared differences:
((10% - 25%)^2 + (20% - 25%)^2 + (30% - 25%)^2 + (40% - 25%)^2) / 4 = 150/16
Finally, we take the square root of the variance to get the standard deviation:
sqrt(150/16) = 3.681%
Therefore, the closest answer choice is B) 12.91%.

Stock A,has Returns of 10%,20%,30%,and 40%,over the Last Four Years