Demonstrate to your colleagues how you would calculate the expected
To calculate the monthly close stock price’s standard deviation, you would need: 1) a list of all closing prices over a given time period (monthly); 2) their respective means; 3) their squared differences from those means. The formula for calculating standard deviation is
SD = √(∑(x – ̅x)^2 / n). Where x represents individual stock close prices, ̅x represents its average value and n represents total number of stocks.
Firstly, gather all closing data points over the selected period and subtract each point from its respective mean to obtain difference values. Then square each difference result to get rid off negative signs if applicable and sum them up together – this gives us our numerator part in SD equation above. After that divide this cumulative result with total number of stocks collected – now we have everything needed to calculate SD!
Finally use calculated figures in SD equation above by substituting into it previously computed variables such as average and summation results; once done you should be able to find out your desired measurement i-e Stock’s Monthly Close Standard Deviation!