Poll Results
Please login to vote and see the results.
Participate in Poll, Choose Your Answer.
The target semideviation of the returns over the 10 years if the target is 2% is closest to:
Please briefly explain why you feel this question should be reported.
Please briefly explain why you feel this answer should be reported.
Please briefly explain why you feel this user should be reported.
Hello,
Semivariance is defined as the average squared deviation below the mean. Semideviation (sometimes called semistandard deviation) is the positive square root of semivariance.
To com-pute the sample semivariance, for example, we take the following steps:
i. Calculate the sample mean.
ii. Identify the observations that are smaller than or equal to the mean (discarding observations greater than the mean).
iii. Compute the sum of the squared negative deviations from the mean (using the
observations that are smaller than or equal to the mean).
iv. Divide the sum of the squared negative deviations from Step iii by the total
sample size minus 1: n − 1. A formula for semivariance approximating the unbiased estimator is
Since here we need to find target semideviation, with given target of 2%, we will just have to consider the returns which are below 2 %.
In this question, the returns below 2% are 1.5 %, 0%, and -2%.
The deviations for same from 2% target are:
1.5% : -0.5%
0%: -2%
-2%: -4%
Square these deviations, add them, divide the sum by n-1 and take sqr root.
The answer will come as 1.5
2.25 ans is coming … 0.5 ka square – 0.25 , -2 ka square 4 , -4 ka square 16
0.25+4+16 = 20.25
20.25/9= 2.25