In Calculating the Variance of a Portfolio's Returns, Squaring the Deviations

question 64

Multiple Choice

In calculating the variance of a portfolio's returns, squaring the deviations from the mean results in:
I. Preventing the sum of the deviations from always equaling zero
II. Exaggerating the effects of large positive and negative deviations
III. A number for which the unit is percentage of returns

• A) I only
• B) I and II only
• C) I and III only
• D) I, II, and III

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