A stock had returns of 7%,9%,-3%,and 5% over the past four years. What is the standard deviation of this stock for the past four years?
A) 4.5%
B) 6.4%
C) 6.7%
D) 7.2%
E) 7.5%

Question

Quizplus · Accepted Answer

1. Calculate the mean return:
(7% + 9% - 3% + 5%) / 4 = 4.5%
2. Calculate the variance of the returns:
[(7% - 4.5%)^2 + (9% - 4.5%)^2 + (-3% - 4.5%)^2 + (5% - 4.5%)^2] / 4 = 28.25%
3. Calculate the standard deviation:
sqrt(28.25%) = 5.31%
Therefore, the standard deviation of the stock for the past four years is 6.7%.

A Stock Had Returns of 7%,9%,-3%,and 5% Over the Past