The past five monthly returns for PG&E are 3.21 percent, 3.98 percent, 3.81 perc

Question

The past five monthly returns for PG&E are 3.21 percent, 3.98 percent, 3.81 percent, 6.53 percent, and 3.62 percent. Compute the standard deviation of PG&E’s monthly returns. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

The past five monthly returns for PG&E are 3.21 percent, 3.98 percent, 3.81 percent, 6.53 percent, and 3.62 percent. Compute the standard deviation of PG&E’s monthly returns. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

Explanation / Answer

Note: We wil use simple average method in calculation as probability is not given

Month Return of Stock Deviation from expected return Squared A C=A-B C*C 1 -3.21 -6.16 37.90 2 3.98 1.03 1.07 3 3.81 0.86 0.75 4 6.53 3.58 12.85 5 3.62 0.67 0.45 14.73 0.00 53.01 B Expected= return sum of returns/total months 14.73/5 2.95 Variance= Sum of square/n-1 53.01/5-1 53.01/4 13.25 Standard deviation =root of variance 3.64

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