Over the past five years,Southwest Railway stock had annual returns of 10,14,-6,7.5,and 16 percent,respectively.What is the variance of these returns?
A) 0.00548
B) 0.00685
C) 0.00770
D) 0.01370
E) 0.02740

Question

Quizplus · Accepted Answer

Mean = (0.10 + 0.14 - 0.06 + 0.075 + 0.16) / 5 = 0.0830 Var = [(0.10 - 0.083)² + (0.14 - 0.083)² + (-0.06 - 0.083)² + (0.075 - 0.083)² + (0.16 - 0.083)²] / (5 - 1) = 0.0077

Over the Past Five Years,Southwest Railway Stock Had Annual Returns