What is the approximate standard deviation of returns if over the past four years an investment returned 8.0%, - 12.0%, - 12% and 15.0%?
A)9.26%
B)10.26%
C)11.26%
D)12.26%

Question

Quizplus · Accepted Answer

1. Find the average return:
(8.0 + (-12.0) + (-12.0) + 15.0)/4 = -0.25%

2. Calculate the variance of returns:
[(8.0 - (-0.25))^2 + (-12.0 - (-0.25))^2 +( -12.0 - (-0.25))^2 + (15.0 - (-0.25))^2]/4 = 105.1875

3. Calculate the standard deviation:
sqrt(105.1875) = 10.26%

What Is the Approximate Standard Deviation of Returns If Over