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When Calculating the Variance of a Portfolio's Returns Squaring the Deviations

Question 74

Multiple Choice

When calculating the variance of a portfolio's returns squaring the deviations from the mean results in ________.
I.preventing the sum of the deviations from always equaling zero
II.exaggerating the effects of large positive and negative deviations
III.a number in units of percentage of returns


A) I only
B) I and II only
C) I and III only
D) I, II and III

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