Hi guys,
Can someone please explain the maths to me behind why we mutliple the downside deviation by the sqrt of 12, i.e. the sqrt of n.
I would rather understand than just commit it to memory for the exam.
Cheers,
Syd
Hi guys,
Can someone please explain the maths to me behind why we mutliple the downside deviation by the sqrt of 12, i.e. the sqrt of n.
I would rather understand than just commit it to memory for the exam.
Cheers,
Syd
deviation is like std deviation.
square (monthly std deviation) - to get monthly variance
that multiplied by 12 = annual variance
so annual std deviation = monthly deviation * Sqrt(12)
Now that cpk123 said so too, I hope you’re happy with that lol