Respuesta :
Investment returns over the last four years have been 0.1, 0.12, 0.08, and 0.13, with a standard deviation of returns of 0.12582.
What is the standard deviation of stock return?
The standard deviation, a statistical measure of market volatility, measures how widely prices differ from the average price. If prices fluctuate within a narrow trading range, the standard deviation will show a low value, indicating low volatility.
How is the return standard deviation calculated?
To calculate the variance for a given data point, subtract the mean value from the value of that point. Then, square each deviation that is produced after adding all the points together. To obtain this, deduct one from the total number of data points. Take the square root of the variance to determine the standard deviation.
Expected return= (0.1 - 0.12 - 0.08 + 0.13) / 4
= 0.0075
r r - R [tex](r - R)^{2}[/tex]
0.1 0.1 - 0.0075= 0.0925 0.00856
-0.12 - 0.12 - 0.0075= 0.1275 0.01626
-0.08 - 0.08 - 0.0075= 0.0875 0.00766
0.13 0.13 - 0.0075= 0.1225 0.01501
0.04749
Standard Deviation= [tex]\sqrt{\frac{0.04749}{4-1} }[/tex]
= [tex]\sqrt{0.01583}[/tex]
= 0.12582
Learn more about standard deviation of returns: https://brainly.com/question/29569139
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