A stock had returns of 11 percent,26 percent,8 percent,and −38 percent annually for the past 4 years.What is the mean and variance of these returns?
A)1.75%; .057319
B)1.75%; .076425
C)3.50%; .057319
D)3.50%; .062833
E)3.50%; .076425

Question

Quizplus · Accepted Answer

Mean = (0.11 + 0.26 + 0.08 − 0.38)/ 4 = 0.0175,or 1.75% σ² = [(0.11 − 0.0175)² + (0.26 − 0.0175)² + (0.08 − 0.0175)² + (-0.38 − 0.0175)²] / (4 − 1)= 0.076425

A Stock Had Returns of 11 Percent,26 Percent,8 Percent,and −38