You've owned a share of stock for 6 years. It returned 5% in 3 of those years and -5% in the other 3. What was the variance?
A) 15.
B) 150.
C) 30.
D) 0.

Question

Quizplus · Accepted Answer

First, we need to find the average return: 
(5% + 5% + 5% - 5% - 5% - 5%)/6 = 0%. 
Then, we can find the variance: 
[(0% - 0%)² + (5% - 0%)² + (5% - 0%)² + (-5% - 0%)² + (-5% - 0%)² + (-5% - 0%)²]/6 
= 30/6 
= 5.

You've Owned a Share of Stock for 6 Years