The average squared difference between the actual return and the average return is the:
A) Average return.
B) Variance.
C) Standard deviation.
D) Risk premium.
E) Excess return.

Question

Quizplus · Accepted Answer

The variance of a set of returns measures the average squared difference between the actual returns and the average return, serving as a key indicator of the volatility or risk associated with an investment.

The Average Squared Difference Between the Actual Return and the Average