Explanation:
The standard deviation of the mean (also known as the standard error) is calculated by dividing the standard deviation by the square root of the number of observations (n). For 5 years of monthly data, n = 5 * 12 = 60. Standard Error = 1.8% / √60 = 1.8% / 7.746 ≈ 0.2324%
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Q.98 An analyst gathers monthly data about the returns of a stock for the past five years. If the mean monthly return is 6% and the standard deviation of the series of returns is 1.8%, then what is the standard deviation of the mean over the period?
A
0.45%
B
0.23%
C
0.52%
D
1.39%
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