J

#### Jason

deviation (a statistic to measure downside risk based on

a series of investment returns). Downside deviation

considers only returns that fall below a defined Minimum

Acceptable Return (MAR). For example, if the MAR is

assumed to be 10%, the downside deviation would measure

the variation of each period that falls below 10%. The

formula is as follows:

Where Ri = Return for period I

Where N = Number of Periods

Where M = Period Arithmetic Mean

Where Rmar = Period Minimum Acceptable Return

Where Li = Ri - Rmar (IF Ri - Rmar < 0 )or 0 ( IF Ri -

Rmar >= 0 )

Downside Deviation = ( (Σ(Li)^2 )/N )^.5

For more clarity on the formula - go to

http://support.pertrac2000.com/statistics2000.asp and

choose "downside deviation" on the left side of the

screen. Bonus points if someone can help me also figure

out semi-deviation (right below downside deviation on the

website). I have a copy of the pertrac software but

would like to be able to indepently calculate the

statistic using an excel function. The Pertrac software

calculates this as 3.29% for the following stream of 50

data points:

7.10%

4.20%

4.00%

4.90%

4.80%

5.30%

(2.10%)

2.80%

0.60%

2.10%

3.00%

2.90%

1.50%

4.10%

3.20%

(1.50%)

2.00%

2.20%

(1.70%)

2.90%

0.20%

0.20%

3.10%

(0.60%)

2.60%

1.10%

2.20%

4.30%

5.40%

(0.10%)

2.00%

1.40%

(0.90%)

2.20%

0.50%

1.90%

(1.50%)

3.00%

2.30%

0.90%

(2.10%)

0.20%

5.90%

1.90%

2.10%

(0.90%)

3.20%

3.40%

0.60%

(0.50%)

I would be very grateful for someone's help with this.

Many thanks in advance.

-Jason