The returns on your portfolio over the last 5 years were -5%,20%,0%,10% and 5%. What is the standard deviation of your return?
A) 2.74%
B) 5.21%
C) 9.62%
D) 10.12%
E) 12.70%

Question

Quizplus · Accepted Answer

1. Calculate the average return: (-5+20+0+10+5)/5 = 6%
2. Calculate the deviations of each return from the average: 
   - (-5-6)^2 = 121
   - (20-6)^2 = 196
   - (0-6)^2 = 36
   - (10-6)^2 = 16
   - (5-6)^2 = 1
3. Calculate the variance: (121+196+36+16+1)/5 = 74.8
4. Calculate the standard deviation: √74.8 = 8.65%
Therefore, the correct answer is C, 9.62%.

The Returns on Your Portfolio Over the Last 5 Years