Calculate the standard deviation for each stock. (Do not round intermediate calculations. Round the final answers to 2 decimal places.)
Question
Calculate the standard deviation for each stock.
(Do not round intermediate calculations. Round the final answers to 2 decimal places.)
Solution
To calculate the standard deviation for each stock, you need to follow these steps:
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First, you need to have the return data for each stock. If you don't have it, you can calculate it by subtracting the initial price from the final price and then dividing by the initial price.
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Once you have the return data, calculate the mean (average) return for each stock. You do this by adding up all the returns and dividing by the number of returns.
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Next, subtract the mean from each individual return. This gives you a series of deviations from the mean.
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Square each of these deviations. This gives you a series of squared deviations.
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Take the average of these squared deviations. This is called the variance.
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Finally, take the square root of the variance. This gives you the standard deviation.
Remember to round your final answers to 2 decimal places.
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