Question 04 A B C D Question 04 + Powerball costs $2 and has a one-to-300 million probability of a $500 million jackpot. State Jackpot Nothing Probability Result 0.00000000333333 0.99999999666667 $500,000,000 $0 Return 24999999900% -100% What is Powerball's expected return? 0 1 A 2 B 4 D 15 16 17 Hint: 18 0.0% -6.7% -16.7% -26.7% 19 20 . Expected Return and Standard Deviation Expected returns E[ Scenario Returns Examp Now suppose at to you estimate Panther Fund. What is the expec 1-PCY) State Excellent Good Pode Crash S State P(S) = Probability of a state r(s) = Return if a state occurs 21 22 23 24 25 26 27 28 29 30 31 32 33 34 Prob of State 25 45 25 OS (25).31145 146.2 0976 or 9.764 Expected Return and Standard Deviation Variance (var): 35 36 37 38 Example Scenario var and Variance calculation a 25031 -0.0076) 4511 250,00625 -0,0976 (3)[r(s)