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:

Warranty Work

Repair or replacement services provided at no charge, covered under a product’s warranty, usually to fix defects or malfunctions within a specific period after purchase.

Sales Price

The amount a customer pays or is charged for a product or service.

Part Replacement

The process of substituting a defective, broken, or outdated component of a machine or system with a new one.

Radioactive Materials

Substances that emit radiation, often used in medical treatments, research, and power generation.