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probability for this investment

The following table gives the anticipated one-year rates of return from a certain investment and their associated probabilities.

Rate of Return
X, % Probability,
Pi
-20 0.10
-10 0.15
10 0.45
25 0.25
30 0.05

a) Calculate the expected rate of return, E(X).

b) Calculate the Variance and the Standard deviation of the returns.

c) What's the probability for this investment to yield a return of less than 10 %?

d) What's the probability for the returns of this investment to be between at least 10 % and at most 25 %?

Solution Summary

Calculate the expected rate of return, E(X).

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