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Students of Communication, study E-Commerce as an auxiliary subject. these are the key points discussed in these Lecture Slides of E-Commerce : Analyzing Risk, Standard Deviation, Dispersion, Variability, Statistical Measure, Clustered, Widely Dispersed, Population, Sample, Calculating
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(^ ): a statistical measure of the dispersion, or variability, of outcomesaround the mean or expected value (
-^ Low standard deviation means that returns aretightly clustered around the mean •^ High standard deviation means that returns arewidely dispersed around the mean
ˆr
(^ )^
(^ )^
(^ ) 2
2
2
1
2
N
2 First, calculate the variance (S^ s =^ S
The standard deviation (s) is the square rootof the variance:
-^ You have been given the following sample of^ stock returns, for which you would like tocalculate the standard deviation:{12%, -4%, 0%, 22%, 5%}
-^ You have been given the following sample of^ stock returns, for which you would like tocalculate the standard deviation:{12%, -4%, 0%, 22%, 5%} •^ Step 2:
Calculate Variance ( )^ (^
)^ (
)
(^ )^
(^ )^
(^ )^
(^ )^
(^ )
−^ +^ −
−^ +
−^
+^ −^
+^ −
=^
−
=
2
2
2
1
2
N
2
2
2
2
2
2
r^ - r^ + r
S^ =^
N- 12 7
4 7
0 7
22 7
5 7 5 1 106
-^ You have been given the following sample of^ stock returns, for which you would like tocalculate the standard deviation:{12%, -4%, 0%, 22%, 5%} •^ Step 3:
Calculate Standard Deviation
-^ You have been provided with the followingpossible returns and their associatedprobabilities.
Calculate the expected return and the standard deviation of return.^ State of Economy
Return^
Probability
Boom^
30%^
15%
Normal^
15%^
60%
Recession
0%^
25%
