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Which of the Following Explains the Computation of Return Variance

Question 17

Multiple Choice

Which of the following explains the computation of return variance in the correct chronological order?


A) Compute demeaned returns,take the probability-weighted average of the demeaned returns and square the resulting number
B) Compute demeaned returns,square the demeaned returns and take the probability-weighted average of these squared numbers
C) Compute demeaned returns and take the probability-weighted average of these squared numbers
D) Compute demeaned returns,square the demeaned returns,take the probability-weighted average of these squared numbers and take square root of the resulting number

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