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that’s a good answer but not necessary to get that complex. just compute the portfolio return for each year then take the average value, the average is 13.1% as noted elsewhere. then, compute the square of the annual return - this average for each year. divide that by the number of observations -1, take the square root and you have 1.1402%.
Year X Y Portfolio (port-mean)^2
2010 12% 16% 14% 8.1E-05
2011 11% 18% 15% 0.000196
2012 14% 12% 13% 0.000001
2013 16% 8% 12% 0.000121
2014 14% 10% 12% 0.000121
mean 13.4% 12.8% 13.1% 1.1402% |
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