i already squred the standard deviation to get the variance, which is 21%. so why do they have %^2. what does that mean For the past three years, Acme Corp. has generated the following sample returns on equity (ROE): 4 percent, 10 percent, and 1 percent. What is the sample variance of the ROE over the last three years? A) 4.6%. B) 21.0(%^2). C) 5.0(%^2). D) 21.0%. Your answer: D was incorrect. The correct answer was B) 21.0(%^2). [(4 - 5)2 + (10 - 5)2 + (1 - 5)2] / (3 - 1) = 21(%^2).
It is just the units that the answer is in. Your SD was in % so when you square it to get your variance your units are (%^2).
The variance is given in units^2. It doesn’t particularly mean anything. It’s just one of those deviations that separates the variance from standard mean. In other words, they are testing your knowledge of the fact that s = sqrt(variance) <=> variance = s^2. Hope that this helps.
thanks
May I know what’s the answer for 21(%^2)? thanks guys.
They are saying UNIT OF STD DEVIATION is (%^2), not (%). And that is correct.
maparam Wrote: ------------------------------------------------------- > May I know what’s the answer for 21(%^2)? thanks > guys. SAMPLE variance = sum(x-mean)^2/(n-1) ***variance = sum(x-mean)^2/n*** mean = (4+10+1)/3 = 5 =((4-5)^2+(10-5)^2+(1-5)^2)/(3-1) =(1(%^2)+25(%^2)+16(%^2))/2 =21(%^2)