how to calculate mean and standard deviation
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Given the holding-period returns shown here, compute the average returns and the standard deviation for Supply Chain Inc. and Wholesale Importers, Inc.
Month Supply Chain Inc. Wholesale Importers
1 6% 4%
2 3 2
3 -1 1
4 -3 -2
5 5 2
6 0 2
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Solution Summary
The following provides all formulas and demonstrates how mean and standard deviation are calculated from a set of data. Results are also calculated in Excel.
Solution Preview
In Excel,
STDEV uses the following formula:
In words, we are squaring the deviations of the x's from ...
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