Squeaky Bluege has been considering an investment in Oak-dale Merchandising. Squeaky has estimated the following probability distribution

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Squeaky Bluege has been considering an investment in Oak-dale Merchandising. Squeaky has estimated the following probability distribution of returns for Oakdale stock:
Return Probability
-10% ................................. .10
0 ..................................... .25
10 ..................................... .40
20 ..................................... .20
30 ..................................... .05
Based on Squeaky's estimates, calculate the expected return and standard devia-tion of Oakdale stock.
Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...
Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...
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Fundamentals of Investments

ISBN: 978-0132926171

3rd edition

Authors: Gordon J. Alexander, William F. Sharpe, Jeffery V. Bailey

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