You have observed the following annual returns for Motherboard Inc.: 25%,15%,-20%,30%,and -15%.What are the variance and standard deviation of returns?
A) Variance = 0.00425; standard deviation = 0.06519
B) Variance = 0.06519; standard deviation = 0.00425
C) Variance = 0.05325; standard deviation = 0.23076
D) Variance = 0.23076; standard deviation = 0.05325

Question

Quizplus · Accepted Answer

Compute average return _{(25%+15%-20%+30%-15%)/5 = 7%} ₅ σ = √[∑ (r_i-7%)²]/(5-1)= √0.05325 = 0.23076 ⁱ⁼¹

You Have Observed the Following Annual Returns for Motherboard Inc