Macro Corporation has had the following returns for the past three years,-10%,10%,and 30%.Calculate the standard deviation of the returns.
A)10%
B)20%
C)25%
D)30%

Question

Quizplus · Accepted Answer

To calculate the standard deviation, we first need to calculate the mean return:

Mean return = (-10% + 10% + 30%)/3 = 10%

Next, we need to calculate the variance:

Variance = [( -10% -10)^2 +(10% - 10)^2 + (30% - 10)^2]/3 = 266.67%

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

Standard deviation = √(266.67%) = 16.33%

Therefore, the closest answer choice is B, which is 20%.

Macro Corporation Has Had the Following Returns for the Past