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

---

Definitions:

Insulin

A hormone produced by the pancreas that regulates the amount of glucose in the blood.

Neurosecretory Cell

Specialized neuron that secretes a hormone into the blood in response to an action potential.

Action Potential

A temporary reversal of an electric membrane potential, allowing for signal conduction in neurons.

Anterior Pituitary Cell

A type of cell located in the anterior lobe of the pituitary gland, responsible for producing and releasing hormones that regulate various bodily functions.