Calculating historical returns interested, following, question

pawn

While I await my L3 results, I have been toying with the following question.

Assumes I have 5 years annual returns of 1,000 securities, partitioned in 10 asset classes of 100 securities each.

I am interested in estimating mean and st dev of my ten asset classes.

How would you go about it? For each class would you:

1) calculate the mean returns of all asset in the class, for each year 1, 2 ,3, 4 and 5; and then calculate mean (geometric, I guess) and standard dev of these annual returns;

or

2) calculate geometric mean of each asset in the class over the 5 years; and then calculate mean and st dev of these geometric means.

I'm sure this was covered somewhere in one of the levels, but where?