Range of Annual Standard Deviations | CFA® Level 1 Exam Preparation

Range of Annual Standard Deviations

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Question

You are examining a group of 6 stocks. Their average annual standard deviations have been 25%, 20%, 15%, 25%, 16%, and 45%. What is the range of annual standard deviations?

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A. B. C. D.

C

The range = the maximum value - the minimum value. Here, we have 45% - 15% = 30%.

To calculate the range of annual standard deviations, we need to find the difference between the highest and lowest standard deviations in the given group of stocks.

The given standard deviations are: 25%, 20%, 15%, 25%, 16%, and 45%.

First, let's arrange them in ascending order: 15%, 16%, 20%, 25%, 25%, 45%

Now, we can easily see that the lowest standard deviation is 15% and the highest standard deviation is 45%. To find the range, we subtract the lowest value from the highest value:

Range = Highest Value - Lowest Value = 45% - 15% = 30%

Therefore, the range of annual standard deviations is 30%.

The correct answer is C. 30.0%.

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