Financial Risk Manager Part 1

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Answer: S²

The variance rate is defined as the square of volatility. Since volatility (s) represents the standard deviation of returns, the variance rate is s². This is a fundamental relationship in statistics and financial mathematics where variance = (standard deviation)².

Author: Nikitesh Somanthe

Quick Answer

Answer-first summary for fast verification

Answer: S²

The variance rate is defined as the square of volatility. Since volatility (s) represents the standard deviation of returns, the variance rate is s². This is a fundamental relationship in statistics and financial mathematics where variance = (standard deviation)².

Author: Nikitesh Somanthe

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If an asset has volatility equal to s, its variance rate is equal to:

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NNikitesh

Last updated: February 2, 2026 at 10:22

0

A

S - 1

B

S²

C

√s

D

S%

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