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    Nayana Murty
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    This document calculates the average return and standard deviation for a hypothetical fund. It first finds the average return of 16.5% by taking the mean of four data points. It then computes the standard deviation of 2.41% using the returns, mean returns, and a formula to determine how far the data points vary from the average. The standard deviation measures the risk of the fund.

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    This document calculates the average return and standard deviation for a hypothetical fund. It first finds the average return of 16.5% by taking the mean of four data points. It then computes the standard deviation of 2.41% using the returns, mean returns, and a formula to determine how far the data points vary from the average. The standard deviation measures the risk of the fund.

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    16 views2 pages

    10

    Uploaded by

    Nayana Murty
    This document calculates the average return and standard deviation for a hypothetical fund. It first finds the average return of 16.5% by taking the mean of four data points. It then computes the standard deviation of 2.41% using the returns, mean returns, and a formula to determine how far the data points vary from the average. The standard deviation measures the risk of the fund.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
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    of 2

    • We will first need to calculate R avg:

    (0.14-0.08+0.09+0.06)/4= 0.165
    • The mean of returns is thus 16.5%
    • Standard Deviation= √(0.14-0.165)² + (-0.080.165)²+ (0.09-0.165)²+
    (0.06-0.165)² = 0.0241
    • The standard deviation of his fund is therefore 2.41%. The above
    example of standard deviation is hypothetical.
    • We will first need to calculate R avg:
    (0.14-0.08+0.09+0.06)/4= 0.165
    • The mean of returns is thus 16.5%
    • Standard Deviation= √(0.14-0.165)² + (-0.080.165)²+ (0.09-0.165)²+
    (0.06-0.165)² = 0.0241
    • The standard deviation of his fund is therefore 2.41%. The above
    example of standard deviation is hypothetical.

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