Fortescue had realised returns of 10%, 25%, -20% and -15% over four quarters. What is the quarterly standard deviation of returns for Fortescue?
A)19.67%
B)25.32%
C)23.13%
D)21.21%

Question

Quizplus · Accepted Answer

The quarterly standard deviation of returns can be calculated using the formula for standard deviation. First, find the mean (average) return: (10% + 25% - 20% - 15%) / 4 = 0%. Then, calculate each return's deviation from the mean, square those deviations, sum them, divide by the number of observations, and finally take the square root. The calculations give a standard deviation of 21.21%.

Fortescue Had Realised Returns of 10%, 25%, -20% and -15