You have a sampling of returns for the Malta Stock Fund.The returns are 7.25 percent,5.63 percent,12.56 percent,and 1.08 percent.What is the mean and variance of this sampling?
A)6.57 percent; .00287
B)6.63 percent; .00225
C)6.65 percent; .00215
D)6.63 percent; .00287
E)6.63 percent; .00215

Question

Quizplus · Accepted Answer

To find the mean, we add up all of the returns and divide by the number of returns:
Mean = (7.25 + 5.63 + 12.56 + 1.08) / 4 = 6.63%
To find the variance, we first need to find the difference between each return and the mean, square those differences, add them up, and divide by the number of returns:
Variance = ((7.25 - 6.63)^2 + (5.63 - 6.63)^2 + (12.56 - 6.63)^2 + (1.08 - 6.63)^2) / 4
Variance = 0.00225 (rounded to 5 decimal places)
Therefore, the best choice is B because it provides the correct mean and variance.

You Have a Sampling of Returns for the Malta Stock