The yield is lower than the risk-free interest rate: 2%, -3%.
lpsd^2=[(2%-3%)^2+(-3%-3%)^2]/(2- 1)
LPSD=0.6083=6.083%
Extended data:
First, the standard deviation of the rate of return
The standard deviation of the rate of return measures the deviation of the actual rate of return around the expected rate of return (that is, the average rate of return) and reflects the risk of investment. The standard deviation of the rate of return is the average of the sum of the squares of the deviation of the rate of return, and then the square is calculated.
The calculation process is to subtract the expected rate of return from the actual rate of return to get the deviation of the rate of return; Then multiply each deviation square by the probability corresponding to the actual rate of return, and sum up to get the variance of the rate of return. Square the variance to get the standard deviation.
The so-called standard deviation decision-making method of expected return refers to a risk-based decision-making method based on the expected return and standard deviation of return of investment.
Two, the types of standard deviation decision-making methods of expected returns, usually have the following two specific practices:
1, maximum expected return method.
Taking the expected value of future income as the representative of future actual income, and using the net present value method and the rate of return method to make investment decisions, it is called the maximum expected income method. It is a simple and commonly used decision-making method under the condition of risk (uncertain future income).
The disadvantage of the expected return method is that it does not consider the risk situation, so the investment risk is great.
2. Expected standard deviation method.
Haru Kyle put forward an accepted decision-making law, the so-called expected standard deviation method.
This law can be described as follows: among the two projects A and B, if one of the following two conditions is met, project A is superior to project B:
1) The expected return of A is greater than or equal to that of B, and the standard deviation of A is less than that of B ... The formula is as follows: E(A)≥E(B) and (a).
2) The expected return of A is greater than B, and the standard deviation of A is less than or equal to B: E(A)E(B) and (A)≤(B).