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Author Question: Find the variance for a security that has three one-year returns of -5, 15, and 20. A) 175.00 B) ... (Read 75 times)

wenmo

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on: Jul 10, 2018
Find the variance for a security that has three one-year returns of -5, 15, and 20.
 
  A) 175.00
  B) 75.00
  C) 58.33
  D) 25.00

Question 2

Find the variance for a security that has three one-year returns of 5, 10, and 15.
 
  A) 10.00
  B) 16.67
  C) 25.00
  D) 30.00


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dlook33

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Reply #1 on: Jul 10, 2018
Answer to Question 1

Answer: A
Explanation: A) Average return = rt/n = (-5 + 15 + 20)/3 = 10
Variance(r) =  (ri - average)2 / (n - 1)
= (-5 - 10)2 + (15 - 10)2 + (20 - 10)2/(3 - 1) = 175.

Answer to Question 2

Answer: C
Explanation: C) Average return = rt/n = (5 + 10 + 15)/3 = 10
Variance(r) =  (ri - average)2 / (n - 1)
= (5 - 10)2 + (10 - 10)2 + (15 - 10)2/(3 - 1) = 25


wenmo

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Reply 2 on: Jul 10, 2018
Thanks for the timely response, appreciate it

nanny

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Reply 3 on: Yesterday
Excellent

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