Which of the following is an estimate of the standard error of the mean?
A)The average annual rate of return divided by the square root of the number of observations
B)The variance divided by the number of observations
C)The standard deviation of returns divided by the square root of the number of observations
D)The variance of returns divided by the square root of the number of observations

Question

Quizplus · Accepted Answer

The standard error of the mean is calculated by dividing the standard deviation by the square root of the number of observations. Therefore, the correct choice is C, which divides the standard deviation of returns by the square root of the number of observations. A is the formula for calculating the standard deviation, but not the standard error of the mean. B is the formula for calculating the standard deviation, but not the standard error of the mean. D is the formula for calculating the variance, but not the standard error of the mean.

Which of the Following Is an Estimate of the Standard