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The variance of expected returns is equal to the square root of the expected returns. a. True b. False
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- This variance is the difference involving spending more or using more than the standard amount. A. favorable variance B. unfavorable variance C. no variance D. varianceThis variance is the difference involving spending less, or using less than the standard amount. A. favorable variance B. unfavorable variance C. no variance D. varianceThe measure of volatility is Select one: a. sigma. b. standard deviation. c. sigma squared. d. variance. e. A and B
- 7. According to mean-variance rule A. The expected return of X is at least equal to the expected return of Y, and the variance is less than that of Y. B. The expected return of X is at least equal to the expected return of Y, and the variance is greater than that of Y. C. The expected return of X exceeds that of Y and the variance is equal to or more than that of Y. D. The expected return of X less than that of Y and the variance is equal to or more than that of Y.Compute for the returns, average of returns and Standard Deviation:Which one of the following statements is TRUE? O a. If the distribution of returns for an asset has a variance of zero, then covariance of returns between that asset and the returns any other asset must equal zero. O b. The covariance allows us to gauge the strength of the relationship between stocks. O c. While the variance and the standard deviation both measure the variability of the returns, the variance is easier to interpret because it is in the same units as the returns themselves. O d. If two assets with return correlation coefficients less than one make up a portfolio, then the portfolio does not take advantage of any diversification benefits.
- In a regression of the single-index model, the R-square is 68%, residual variance is 0.08, beta estimate is 0.7. What is the variance of the market excess return?Using the following returns, calculate the arithmetic average returns, the variances, and the standard deviations for X and Y. Year X Y 1 15% 21% 2 26 36 3 7 13 4 -13 -26 5 11 15(i) Calculate the mean of the probability distribution. (ii) Calculate the variance and standard deviation of this probabilitydistribution.