Expected Return and Standard Deviation
Dates return on x
1981 2.00%
1982 3.00%
1983 6.00%
1984 9.00%
1985 14.00%
Calculate the expected return and standard deviation.
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There are two ways of calculating standard deviation. I have shown both of them:
Method 1:
Variance and standard deviation
X= X 2 =
1981 0.02 0.0004
1982 0.03 0.0009
1983 0.06 0.0036
1984 0.09 0.0081
1985 0.14 0.0196
Total= 0.34 0.0326
n=no of observations= 5
Mean=Expected return= ...
Solution Summary
The expert calculates the expected return and standard deviation.
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