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5 votes
Given the following historical returns, what is the variance?Year Return1 7 percent2 3 percent3 19 percent4 -11 percent5 -1 percentA) .009664B) .012080C) .034018D) .039644E) .048322

2 Answers

1 vote

Answer:

i literly have that question n there is no answe rhere

Step-by-step explanation:

User Grmmph
by
8.1k points
1 vote

Answer:

option (B) 0.01208

Step-by-step explanation:

Data provided in the question:

Year Return

1 7% = 0.07

2 3% = 0.03

3 19% = 0.19

4 -11% = -0.11

5 -1% = -0.01

Now,

Mean = [ Sum of all observations ] ÷ [Total number of observations]

or

Mean = [ 0.07 + 0.03 + 0.19 - 0.11 - 0.01 ] ÷ 5

or

Mean = 0.034

data data-mean (data - mean)²

0.07 0.036 0.001296

0.03 -0.004 0.000016

0.19 0.156 0.024336

-0.11 -0.144 0.020736

-0.01 -0.044 0.001936

=========================================

∑ (Data - mean)² = 0.04832

variance =
\frac{ \sum{\left(x_i - \overline{X}\right)^2 }}{n-1}

or

variance =
(0.04832)/(5-1)

or

Variance = 0.01208

Hence,

The correct answer is option (B) 0.01208

User Natu
by
8.6k points
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