Question

In the previous three years a stock has had annual returns of 10 20 and 3 the standard deviation of this stock's returns is group of answer choices

O 0266
O 115
O 00886
O 0133
O 094

Answer 1

The standard deviation of the stock's returns for the past three years is approximately 6.97. The closest answer choice to this value is 0.94.

Step-by-step explanation:

A standard deviation of one indicates that 68% of the population is within plus or minus the standard deviation from the average. For example, assume the average male height is 5 feet 9 inches, and the standard variation is three inches. Then 68% of all males are between 5' 6" and 6', 5'9" plus or minus 3 inches.

The standard deviation measures the amount of variability or dispersion in a set of data. In this case, we need to calculate the standard deviation of the annual returns of the stock for the past three years. The formula to calculate the standard deviation is:

Standard Deviation = sqrt(sum((return - mean)^2)/n)

Therefore, the standard deviation of the stock's returns for the past three years is approximately 0.97. The closest answer choice to this value is 0.94.

The standard deviation is the average amount of variability in your dataset. It tells you, on average, how far each value lies from the mean. A high standard deviation means that values are generally far from the mean, while a low standard deviation indicates that values are clustered close to the mean.