Define the following terms, using graphs or equations to illustrate your answers where feasible. a. Risk in general; stand-alone risk; probability distribution and its relation to risk b. Expected rate of return c. Continuous probability distribution
Contingency Table
A contingency table can be defined as the visual representation of the relationship between two or more categorical variables that can be evaluated and registered. It is a categorical version of the scatterplot, which is used to investigate the linear relationship between two variables. A contingency table is indeed a type of frequency distribution table that displays two variables at the same time.
Binomial Distribution
Binomial is an algebraic expression of the sum or the difference of two terms. Before knowing about binomial distribution, we must know about the binomial theorem.
Define the following terms, using graphs or equations to illustrate your answers
where feasible.
a. Risk in general; stand-alone risk;
b. Expected rate of return
c. Continuous probability distribution
d. Standard deviation, s; variance
e. Risk aversion; realized rate of return
f. Risk premium for Stock i; market risk premium, MRP
g. Capital Asset Pricing Model (CAPM)
h. Expected return on a portfolio; market portfolio
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