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    Computation of the Standard Deviation of Rates of Return

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    Calculate the standard deviation of the following rates of return

    Year Return
    1 7%
    2 25
    3 14
    4 -15
    5 16

    How do I do this problem

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    https://brainmass.com/business/finance/computation-standard-deviation-rates-return-546824

    Solution Preview

    Steps in solving the problem:

    1. Solve for the mean of the rates of return for 5 years.
    mean = rates of return / n
    Mean= [7+25+14+(-15)+16]/5
    Mean= 9.4
    Year Return (%) Mean
    1 7 9.4
    2 25 9.4
    3 14 9.4
    4 -15 9.4
    5 16 9.4
    Average = 9.4

    2. Solve for the deviation.
    deviation = x - ...

    Solution Summary

    This is a step-by-step method in computing the standard deviation given a set of rates of return.

    $2.19

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