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Calculate and interpret target downside deviation.


Target downside deviation or semideviation is a measure of downside risk. Calculating target downside deviation is similar to calculating standard deviation, but in this case, we choose a target against which to measure each outcome and only include outcomes below that target when calculating the numerator.
The formula for target downside deviation is:

Note that the denominator remains the sample size n minus one, even though we are not using all the observations in the numerator.

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