The variance of an investment's returns is a measure of the:
A) volatility of the rates of return.
B) probability of a negative return.
C) historic return over long time periods.
D) average value of the investment.

Question

Quizplus · Accepted Answer

The variance of an investment's returns is a statistical measure that shows how much the investment's returns fluctuate around the average or expected return over time. This fluctuation or dispersion of returns is often referred to as volatility. So, the correct answer is A) volatility of the rates of return.

The Variance of an Investment's Returns Is a Measure of The