The Historical Returns for the Past Three Years for Stock

Multiple Choice

The historical returns for the past three years for Stock B and the stock market portfolio were Stock B: 24 percent, 0 percent, 24 percent; market portfolio: 10 percent, 12 percent, 20 percent. Calculate the observed variance of the market portfolio returns. (Ignore the correction for the loss of a degree of freedom set out in the text.)

A) 192.0
B) 128.0
C) 28.0
D) 18.7