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12.Using the following stock price data for BHP: August 2007 38.42 September 2007 44.55 October 2007 46.10 November 42.98 a)Calculate the standard deviation of returns

12.Using the following stock price data for BHP:

August 2007	38.42
September 2007	44.55
October 2007	46.10
November	42.98

a)Calculate the standard deviation of returns on BHP.

(b)Assuming that the returns in these months are a random draw from a normal distribution generating the returns on BHP, provide an interpretation of the risk from investing in BHP.

(c)Do you realistically believe that the standard deviation of returns you have calculated is a reasonable estimate of the risk of investing in BHP?

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