You are examining a special group of 5 stock market indices. Of these 5, the returns were 4%, 8%, 12%, 16%, and 10%. What is the population variance of this group of stock market indices?
Click on the arrows to vote for the correct answer
A. B. C. D.B
The population variance is equal to the sum of the squared differences between each population member and the population mean, divided by the number of items in the population. In this case, wehave a mean of 10%. The first squared difference will be (4% - 10%)^2 = 0.0036. The others will be 0.0004, 0.0004,
0.0036, and 0. The sum of these squared differences is 0.008, and divided by 5, we get 0.0016 = 16%%.