What Is the Approximate Variance of Returns If Over the Past

question 47

Multiple Choice

What is the approximate variance of returns if over the past 3 years an investment returned 8.0%,-12.0%,and 15.0%?

• A) 31
• B) 131
• C) 182
• D) 961

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Definitions:

Yields to Maturity

The total return anticipated on a bond if it is held until it matures, considering all interest payments and the principal repayment.

Yield to Maturity

The total return anticipated on a bond if the bond is held until it matures, considering both the interest payments received and any gain or loss if the bond is purchased at a discount or premium.

Coupon

A detachable portion of a bond that is given up in return for the periodic interest payments.

Interest Rates

The cost of borrowing money or the return on invested funds, typically expressed as a percentage.