Risk and Return: Stand-Alone Risk Stand-alene risk is the risk an investor would face if he of she held return is high enough to compensate for its perceived The expected rate of return is the retum expectes to be realized from an itviestrered it is calculated as the of the probablity dstribution of possele resuts as shown below: Bxpectedrateofretura=i=D1r1+D2r2++Dnre=i=15D1ri The an assets probabiity distrioution, the lower its risk. Teo useful measures of stand-alone risk are standard deviatisn asd conemicane 8 variation. 5 tandard devistion is a statistical measure of the variabity of a set of obvervations as stown below: Standarddeviation=v=i=12P(xii)2 If you have o sample of actual histarical dota, then the standard devotion calculation would be changed as follows: t=5=T1A=1T(TeTAEe)2 as the risk messure witen the expected returns on two aiternatives are not Quantitative Problem: You are given the falboing probabiliy divtroution for CHC Enterpriust. Risk and Return: Stand-Alone Risk Stand-alene risk is the risk an investor would face if he of she held return is high enough to compensate for its perceived The expected rate of return is the retum expectes to be realized from an itviestrered it is calculated as the of the probablity dstribution of possele resuts as shown below: Bxpectedrateofretura=i=D1r1+D2r2++Dnre=i=15D1ri The an assets probabiity distrioution, the lower its risk. Teo useful measures of stand-alone risk are standard deviatisn asd conemicane 8 variation. 5 tandard devistion is a statistical measure of the variabity of a set of obvervations as stown below: Standarddeviation=v=i=12P(xii)2 If you have o sample of actual histarical dota, then the standard devotion calculation would be changed as follows: t=5=T1A=1T(TeTAEe)2 as the risk messure witen the expected returns on two aiternatives are not Quantitative Problem: You are given the falboing probabiliy divtroution for CHC Enterpriust