"Dealing With Risk"

A table accompanying "Dealing with risk" (Business Week Investor, Jan. 17), included an incomplete formula. The correct way to calculate the standard deviation of investments is to average an investment's monthly returns over the past 36 months or longer. Then subtract the average from each of the individual monthly returns. Square each figure, add the results, and divide by 36 or the number of months looked at. The square root

of this number is the standard deviation.

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE