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. The expected return. The standard deviation of the return. Data table Click on the following icon in order to copy its contents into a spreadsheet.) 40% Probability Return - 80% 20% -65% 20% -40% 10% -20% 10% 1,000%

. The expected return. The standard deviation of the return. Data table Click on the following icon in order to copy its contents into a spreadsheet.) 40% Probability Return - 80% 20% -65% 20% -40% 10% -20% 10% 1,000%

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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The following table..shows the one-year return distribution of Startup, Inc. Calculate: a. The expected return. b. The standard deviation of the return. Data table (Click on the following icon in order to copy its contents into a spreadsheet.) 40% Probability Return - 80% 20% -65% 20% - 40% 10% -20% 10% 1,000%
Transcribed Image Text:The following table..shows the one-year return distribution of Startup, Inc. Calculate: a. The expected return. b. The standard deviation of the return. Data table (Click on the following icon in order to copy its contents into a spreadsheet.) 40% Probability Return - 80% 20% -65% 20% - 40% 10% -20% 10% 1,000%
Expert Solution
Step 1: Define expected return and standard deviation

Expected return is a statistical measure that calculates the average return an investment is likely to generate over a certain period of time. It is calculated by multiplying the possible outcomes of an investment by their respective probabilities and summing them.

On the other hand, standard deviation is a statistical measure that quantifies the degree of variation or dispersion in the returns of an investment.

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