Annualized Downside Deviation

I’m stuck in calculating downside deviation shown in the cfai text, page 83, vol 5

More specifically, i’m confused in how you get to the third column of exhibit 29. The footnote tells you that (HF return-hurdle rate)^2 is only calculated when fund/index return < hurdle rate which is 0.4167.

THere are couple instances i see where we get a value for column 3 when fund/index return > hurdle

eg. for March (-1/-1.6)>0.4167. why did cfai calculate a value for this month on column 3?

Thanks in advance. Spending too much time trying to figure this out.

it is only calculated when fund return is less than 0.4167

so sum up squares where index returns are -1,-1.6, -1, -1 (which is 8.6348)

i think you mean -1,-1.2, -1, -1. I just don’t understand why -1 is used in March since -1/-1.6>0.4167

I read the foot note wrong. I got it now. Thanks!