variance = [(-0.10 - 0.025)^2 + (0.05 - 0.025)^2 + (0.17 - 0.025)^2 +(-0.02 - 0.025)^2] / 4
= 0.0393 / 4
= 0.00983
std dev is the square root of variance
s = 0.00983^1/2
= 0.09912, or 9.91%
answer is b
Suppose you have the following data on an asset's historical returns:
Year 1 2 3 4
Return -10% 5% 17% -2%
Calculate the expected return and the standard deviation for this asset.
a.
E(r) = 2.50%; Std(r) = 19.82%
b.
E(r) = 2.50%; Std(r) = 9.91%
c.
E(r) = -2.50%; Std(r) = 9.91%
d.
E(r) = 2.50%; Std(r) = 11.45%
