Stocks B,has returns of 5%,15%,30%,and 110%,over the most recent four year period.What is the stock's standard deviation of return over this time period?
A)64.25%
B)56.75%
C)47.78%
D)32.05%

Question

Quizplus · Accepted Answer

To calculate the standard deviation of returns, we first need to find the average return or the expected return.

Average return = (5% + 15% + 30% + 110%)/4 = 40%

Next, we need to calculate the variance of returns:

Variance = [(5% - 40%)^2 + (15% - 40%)^2 + (30% - 40%)^2 + (110% - 40%)^2]/4

Variance = [(-35)^2 + (-25)^2 + (-10)^2 + (70)^2]/4

Variance = 2,225

Finally, we need to take the square root of the variance to get the standard deviation:

Standard deviation = √2,225 = 47.78%

Therefore, the answer is choice C - 47.78%.

Stocks B,has Returns of 5%,15%,30%,and 110%,over the Most Recent Four