Which of the following is an estimate of standard error?
A)The average annual rate of return divided by the square root of the number of observations
B)The variance divided by the number of observations
C)The standard deviation of returns divided by the square root of the number of observations
D)The variance of returns divided by the square root of the number of observations

Question

Quizplus · Accepted Answer

The standard error is a measure of the precision of an estimate. It is typically calculated as the standard deviation of the estimate divided by the square root of the sample size. In finance, the standard error of returns is often used as an estimate of the standard error. This is equivalent to the standard deviation of returns divided by the square root of the number of observations, which is option C.

Which of the Following Is an Estimate of Standard Error