Purchase Solution

Expected return and standard deviation

Not what you're looking for?

Ask Custom Question

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.