The variance of an investment's returns is a measure of the:
A)Volatility of the rates of return
B)Probability of a negative return
C)Historic return over long periods
D)Average value of the investment

Question

Quizplus · Accepted Answer

The variance of an investment's returns measures how much the individual returns deviate from the average return, which in turn reflects the volatility of the investment. A high variance indicates higher volatility and a greater potential for fluctuations in returns. Therefore, the correct answer is A. The other options are not directly related to the variance of an investment's returns.

The Variance of an Investment's Returns Is a Measure of The