Ford Motor Company had realized returns of 10%,20%,20%,and 10% over four quarters.What is the quarterly standard deviation of returns for Ford calculated from this sample?

Question

Quizplus · Accepted Answer

The quarterly standard deviation of returns for Ford can be calculated using the formula:σ = √(Σ(x - μ)² / (n - 1))where:σ is the standard deviationx is the return for each quarterμ is the mean returnn is the number of quartersIn this case, the mean return is (10% + 20% + 20% + 10%) / 4 = 15%. The variance is:σ² = (Σ(x - μ)² / (n - 1))= ((10% - 15%)² + (20% - 15%)² + (20% - 15%)² + (10% - 15%)²) / (4 - 1)= 32.5%Therefore, the quarterly standard deviation of returns for Ford is:σ = √(σ²) = √(32.5%) = 5.77%The correct answer is A.

Ford Motor Company Had Realized Returns of 10%,20%,20%,and 10% Over