Over the Past 3 Years an Investment Returned 18%,−12%,and 15

question 91

Multiple Choice

Over the past 3 years an investment returned 18%,−12%,and 15%.What is the variance of returns?

• A) 231
• B) 182
• C) 546
• D) 961

Understand the factors that influence changes in the Consumer Price Index (CPI) and how they impact the cost of living.

Comprehend the difference between the GDP deflator and the CPI in measuring inflation.

Understand the application of CPI to convert past salaries or prices to their present-day equivalents.

Analyze how changes in the prices of goods and services in a simple economy affect the CPI.

---

Definitions:

Random Variable

An attribute whose numerical values stem from the occurrence of a random event.

Probability

Probability is a measure of the likelihood that an event will occur, often expressed as a number between 0 and 1, where 1 indicates certainty.

Mutually Exclusive Event

Situations or events that cannot occur at the same time, meaning the occurrence of one event precludes the occurrence of the other.

Independent Event

An independent event is an event whose outcome is not influenced by the outcome of another event; in probability, this means that the occurrence of one event does not change the probability of another.