CFA Practice Question

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CFA Practice Question

An analyst gathered the following annual return information about a portfolio since its inception on January 1, 2009:

Year | Portfolio return
2009 | 8.6%
2010 | 11.2%
2011 | 12.9%
2012 | 15.1%
2013 | -9.4%

The portfolio's mean absolute deviation for the five-year period is closest to ______.
A. 4.86%
B. 6.83%
C. 7.68%
Explanation: Compute the mean: (8.6 + 11.2 + 12.9 + 15.1 - 9.4) / 5 = 7.68% and compute MAD, (|8.6 - 7.68| + |11.2 - 7.68| + |12.9 - 7.68| + |15.1 - 7.68| + |-9.4 - 7.68|) / 5 = 6.83%.

User Contributed Comments 2

User Comment
asalonga7 is there a way to do this on the ba2 or is this a manual calculation every time
aurihughes manual calculation.
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