The table below gives the deviations of a portfolio's annual total returns from its benchmark's annual returns, for a six-year period ending in Year 6. (See the Excel Data File.) The arithmetic mean return and median return are the closest to ________.
A) mean = -2.00% and median = -4.28%.
B) mean = -2.00% and median = -1.67%.
C) mean = -1.67% and median = -0.56%.
D) mean = -1.67% and median = 0.56%

Question

The table below gives the deviations of a portfolio's annual total returns from its benchmark's annual returns, for a six-year period ending in Year 6.  (See the Excel Data File.) The arithmetic mean return and median return are the closest to ________.
A) mean = -2.00% and median = -4.28%. 
B) mean = -2.00% and median = -1.67%. 
C) mean = -1.67% and median = -0.56%. 
D) mean = -1.67% and median = 0.56%

Quizplus · Accepted Answer

To find the mean return, we need to sum all the deviations and divide by the number of observations. 
Sum of deviations = -12.00 - 4.00 - 3.00 - 1.00 - 1.00 - 1.00 = -22.00
Mean = -22.00/6 = -3.67%
Therefore, option A and B can be eliminated.

To find the median return, we need to arrange the deviations in ascending order:
-4.00, -3.00, -1.00, -1.00, -1.00, -12.00
The median is the middle value, which is -1.00. 
Therefore, option D can be eliminated, leaving us with Option C as the correct answer.

The Table Below Gives the Deviations of a Portfolio's Annual