The probability distribution of a less risky expected return is more peaked than that of a riskier return. What shape would the probability distribution have for (a) completely certain returns and (b) completely uncertain returns?© BrainMass Inc. brainmass.com June 3, 2020, 9:06 pm ad1c9bdddf
The variance of a normally distributed probability distribution is an indication of riskiness, i.e., how much can it fluctuate with respect to the mean or the expected value of the return. The peak of a normal distribution bell shaped curve is always at its mean, and the spread on the two sides of the ...
The probability distribution of a less risky expected return is discussed.