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5. The expected returns (r) and the corresponding probabilities are listed below. Calculate the mean, variance,...

5. The expected returns (r) and the corresponding probabilities are listed below. Calculate the mean, variance, and standard deviation for the expected returns. Show your work. r p 5 .5 7 .1 3 .4.

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Answer #1

Q.5)

r p r * p r​​​​​​2 * p
5 0.5 2.5 12.5
7 0.1 0.7 4.9
3 0.4 1.2 3.6

Mean for the expected returns is,

Variance for the expected return is,

Standard deviation for the expected return is,

Therefore,

Mean = 4.4

Variance = 1.64

Standard deviation = 1.2806

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