The Variance of Returns Is Computed by Dividing the Sum

question 70

Multiple Choice

The variance of returns is computed by dividing the sum of the:

• A)squared deviations by the number of returns minus one.
• B)average returns by the number of returns minus one.
• C)average returns by the number of returns plus one.
• D)squared deviations by the average rate of return.
• E)squared deviations by the number of returns plus one.

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Definitions:

Year 2

The second year in a sequence, often used in financial and operational planning or analysis.

Debt-to-Equity Ratio

A measure of a company's financial leverage calculated by dividing its total liabilities by shareholders' equity; it indicates the proportion of equity and debt the company is using to finance its assets.

Year 2

A reference to the second year in a given context, typically used in financial forecasting or product development timelines.

Return On Total Assets

A financial metric that measures a company's earnings before interest and taxes (EBIT) relative to its total asset value.