A stock had returns of 14 percent,3 percent,9 percent,and -12 percent annually for the past four years.What is the mean and variance of these returns?
A)3.50%;.0069
B)3.50%;.0127
C)3.50%;.0381
D)9.50%;.0100
E)9.50%;.0033

Question

Quizplus · Accepted Answer

Mean = (.14 + .03 + .09 -.12)/4 = .0350,or 3.50%Total squared deviation = (.14 - .035)² + (.03 - .035)² + (.09 - .035)² + (-.12 - .035)² = .0381Variance = .0381/(4 - 1)= .0127

A Stock Had Returns of 14 Percent,3 Percent,9 Percent,and -12