Over the past five years, a stock returned 8.4 percent, 8.7 percent, 3.2 percent, 1.5 percent, and 11.5 percent, respectively.What is the variance of these returns?

Question

Quizplus · Accepted Answer

To calculate the variance, first find the mean of the returns: (8.4 + 8.7 + 3.2 + 1.5 + 11.5) / 5 = 6.66. Then, calculate each return's deviation from the mean, square it, and find the average of these squared deviations: [(8.4-6.66)² + (8.7-6.66)² + (3.2-6.66)² + (1.5-6.66)² + (11.5-6.66)²] / 5 = 0.006824.

Over the Past Five Years, a Stock Returned 8