Question
How is mean absolute deviation computed?
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Answer
MAD=∑∣xi−xˉ∣/n
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Question
What is the population variance formula?
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Answer
σ2=∑(xi−μ)2/N
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Question
How does the geometric mean differ from the arithmetic mean for returns?
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Answer
It captures compound multi-period growth using (1+R) products.
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Question
Why is the arithmetic mean the best estimate of the next single-period return?
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Answer
It is the simple average of period returns.
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