An asset has annual returns of 11 percent, 17 percent, - 21 percent, 3 percent and 18 percent. What is the variance?
A) .01210
B) .01329
C) .02568
D) .02748
E) .01964

Question

Quizplus · Accepted Answer

1. Calculate the mean:

Mean = (11% + 17% - 21% + 3% + 18%) / 5 = 5.6%

2. Calculate the variance:

Variance = [(11% - 5.6%)^2 + (17% - 5.6%)^2 + (-21% - 5.6%)^2 + (3% - 5.6%)^2 + (18% - 5.6%)^2] / 5

Variance = 0.2568

Therefore, the answer is C.

An Asset Has Annual Returns of 11 Percent, 17 Percent