Question

How is Variance defined in the context of investment evaluation?

a.

Mean of the squares of the deviations of returns

b.

Sum of the squares of the deviations of returns

c.

Square root of the mean of the deviations of returns

d.

Average value of the deviations of returns

Posted under IC 89 Management Accounting

Answer: (a).Mean of the squares of the deviations of returns Explanation:Variance is defined as the mean of the squares of the deviations of returns with reference to their average value.

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Q. How is Variance defined in the context of investment evaluation?
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