The variance of a stock's returns can be calculated as the:
A) average value of deviations from the mean.
B) average value of squared deviations from the mean.
C) square root of the average value of deviations from the mean.
D) sum of the deviations from the mean.

Question

Quizplus · Accepted Answer

Variance is the average value of squared deviations from the mean. It measures the spread of the data points around the mean. It is calculated by taking the squared deviation of each data point from the mean, summing them up, and dividing by the number of data points.

The Variance of a Stock's Returns Can Be Calculated as The