Expected return and standard deviation
Not what you're looking for?
The probability the economy will contract is 0.2, the probability of moderate growth is 0.6, and the probability of a rapid expansion is 0.2
If the economy contracts, the expected retun on the portfolio is 5%. Moderate growth will have an 8% return, and rapid expansion will return 15%.
What is the expected return? What is the standard deviation of the return?
Purchase this Solution
Solution Summary
The solution explains how to calculate the expected return and standard deviation given the probability distribution.
Solution Preview
The expected return is calculated as Sum(Probability X associated return)
Expected return = 0.2X5% ...
Purchase this Solution
Free BrainMass Quizzes
Measures of Central Tendency
Tests knowledge of the three main measures of central tendency, including some simple calculation questions.
Terms and Definitions for Statistics
This quiz covers basic terms and definitions of statistics.
Measures of Central Tendency
This quiz evaluates the students understanding of the measures of central tendency seen in statistics. This quiz is specifically designed to incorporate the measures of central tendency as they relate to psychological research.
Know Your Statistical Concepts
Each question is a choice-summary multiple choice question that presents you with a statistical concept and then 4 numbered statements. You must decide which (if any) of the numbered statements is/are true as they relate to the statistical concept.