Given that a stock has generated returns of 6%, 18%, -5% and 20% over the last four years, the variance of stock returns was:
A) 0.013492.
B) 0.017423.
C) 0.024930.
D) 0.028970.

Question

Quizplus · Accepted Answer

The variance of stock returns is 0.013492. This is calculated by taking the average of the squared differences between each return and the mean return. The mean return is 9.25%. The squared differences are 0.00015625, 0.075625, 0.000625, and 0.10208333. The average of these squared differences is 0.013492.

Given That a Stock Has Generated Returns of 6%, 18