Given the following historical returns, what is the variance? year return1 7 percent2 3 percent3 19 percent4 -11 percent5 -1 percenta) .009664b) .012080c) .034018d) .039644e) .048322

option (B) 0.01208

Explanation:

Data provided in the question:

Year   Return

1              7% = 0.07

2             3%  = 0.03

3             19% = 0.19

4             -11% = -0.11

5             -1% = -0.01

Now,

Mean = [ Sum of all observations ] ÷ [Total number of observations]

or

Mean = [ 0.07 + 0.03 + 0.19 - 0.11 - 0.01 ] ÷ 5

or

Mean = 0.034

data           data-mean           (data - mean)²

0.07                0.036                  0.001296

0.03               -0.004                  0.000016

0.19                 0.156                  0.024336

-0.11                -0.144                  0.020736

-0.01               -0.044                  0.001936

=========================================

                    ∑ (Data - mean)² = 0.04832

variance =

or

variance =

or

Variance = 0.01208

Hence,

The correct answer is option (B) 0.01208

press the paper clip and attach a file!

answer; experimentation;