Respuesta :
Answer:
Standard deviation = 8.27 percent
Step-by-step explanation:
Average = (Σx)/N
The average is the sum of variables divided by the number of variables.
x = each variable
N = number of variables = 5
Let the unknown percent be y
6 = (8 - 3 + 12 + 17 + y)/5
y = 30 - 34 = - 4
The standard deviation is the square root of variance. And variance is an average of the squared deviations from the mean.
Mathematically,
Standard deviation = σ = √[Σ(x - xbar)²/N]
x = each variable
xbar = mean = 6 percent
N = number of variables
σ = √[{(8 - 6)² + (-3 - 6)² + (12 - 6)² + (17 - 6)² + (-4 - 6)²}]/(5)]
σ = √[[(2)² + (-9)² + (6)² + (11)² + (-10)²]/(5)]
σ = √[(4 + 81 + 36 + 121 + 100)/(5)] = √(342/5) = 8.27 percent.
Answer:
Standard deviation of stock's return = 8.27%
Step-by-step explanation:
Average = sum/ total no.
Since the given average is for 5 years but the yearly returns are given for four years, we have to first find the missing return for fifth year
Average = sum/ total number
Since average=0.06 and total no. is 5, we can find the missing no. X
(0.08 - 0.03 + 0.12 + 0.17 + X)÷5 = 0.06
X = - 0.04
Variance is the the average of the squared differences from the Mean.
Variance = 1/5[[tex](0.08 - 0.06)^{2}[/tex] + [tex](- 0.03 - 0.06)^{2}[/tex] + [tex](0.12 - 0.06) ^{2}[/tex]+ [tex](0.17 - 0.06)^{2}[/tex] + [tex](-0.04 - 0.06)^{2}[/tex]]
= 0.0342 ÷ 5
= 0.00684
Standard deviation = squar-root of variance
S.D = √0.00684
= 8.27%
