Please see this link for the relevant information.

The question is: *“What is the Sharpe ratio for an investment in the Nopat Fund over the five years from 2005-2009? What is the Sharpoe ratio for an inestment in the Emfund over the six years 2004-2009? Which Sharpe ratio is more preffered?”* I am trying to compute standard deviation with the “Nopat annual HPR” I start off by computing the mean which is 6.28%. This is correct in the book. However, when I compute the standard deviation I get a value of 6.06 when the answer is 6.77. To come to this, I perform the following computations: **(-5.44% - 6.28%)^2 +(11.08%-6.28%)^2 +(6.66% - 6.28%)^2 +(10.48% - 6.28%)^2 +(8.61% - 6.28%)^2 / 5****==> ****.01374 + .00230 + .00001 + .00176 + .00054 = .01835 / 5 = .00367.** When I take the square root to get standard deviation I get **6.06%.** The book says it is **6.77%.**

Furthermore, when I try and compute the standard deviation for the emfund, I run into the same problem. I start by finding the mean of the fund return which is **4.4** (as confirmed by the book) but then when I try to compute the standard deviation, I get the wrong answer: **(3% - 4.4%)^2 + (4% - 4.4%)^2 + (4.3%-4.4%)^2 + (5% - 4.4%)^2 + (4.1% - 4.4%)^2 + (6% - 4.4%)^2 / 6**

**==>**

**.00020 + .00002 + 0 + .00004 + .00001 + .00026 = .00053 / 6 = .00009**

When I take the square root I get **.00936.** The book has the standard deviation as **1.01%**

In a previous problem using the information from the attached link, the book asked for us to find the sample SD “using the emfunds returns as a sample” (meaning that in this case, the sample mean is no different than the regular mean). Their result was **1.01%.** Sample SD is calculated by dividing the variance by N-1 and not N or in this case, 5 instead of 6. The books result for Sample standard deviation was **1.01%** but they also list **1.01%** as the standard deviation for

For both problems I come fairly close to getting the correct SD. I must be making a small but significant mistake but I cannot find it.

Thanks.