NISM Certifications · NISM-Series-XV: Research Analyst · Fundamentals of Research
An analyst studies the share prices of a company and finds that 5 yearly returns are 10%, 20%, 30%, 40% and 50%. What is the sample standard deviation of these returns (in percentage points, rounded to two decimals)?
The sample standard deviation is 15.81 percentage points. The mean is 30, the sum of squared deviations is 1,000, and dividing by n minus 1 (four) gives a variance of 250, whose square root is 15.81. Dividing by five would give 14.14, the population value.
- A15.81Correct
- B14.14
- C10.00
- D158.11
Explanation
Mean = 30. Deviations squared: 400, 100, 0, 100, 400 = 1000. Sample variance = 1000/(5-1) = 250, so SD = 15.81. Dividing by 5 gives variance 200 and SD 14.14, the population figure, which is the key distractor.
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