Which One of the Following Best Defines the Variance of an Investment's

question 49

Multiple Choice

Which one of the following best defines the variance of an investment's annual returns over a number of years?

• A) The average squared difference between the arithmetic and the geometric average annual returns
• B) The squared summation of the differences between the actual returns and the average geometric return
• C) The average difference between the annual returns and the average return for the period
• D) The difference between the arithmetic average and the geometric average return for the period
• E) The average squared difference between the actual returns and the arithmetic average return

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Definitions:

CCF

An abbreviation for 100 cubic feet, commonly used as a measure for billing utility usage like water or natural gas.

Energy-Efficient

Describes products or services that use less energy to perform the same task or work as conventional products, reducing energy waste.

Gas Furnace

A heating system that uses natural gas as fuel to produce heat for residential or commercial spaces.

Oil Furnace

A heating device that uses oil as fuel to produce heat for warming a space.