The Probability Distribution for the Rate of Return on an Investment

question 113

Short Answer

The probability distribution for the rate of return on an investment is
$\begin{array}{cc}\text { Rate of Return }\\\text { In Percent) }&\text { Probability }\\9.5 & .1 \\9.8 & .2 \\10.0 & .3 \\10.2 & .3 \\10.6 & .1\end{array}$
a. What is the probability that the rate of return will be at least 10%?
b. What is the expected rate of return?
c. What is the variance of the rate of return?

---

Definitions:

Bottom-up

An approach or process that starts at the lowest or most basic level and progresses upwards, often encouraging participation and input from all levels of a hierarchy.

Psychological Size

A concept related to the perceived power or influence one individual has over another, often influencing social dynamics and interactions.

Genuine Interest

A sincere and deep level of engagement or curiosity in a particular subject, activity, or person, often leading to intrinsic motivation and enjoyment in related tasks.

Psychological Size

A term which is not commonly used in standard references and might be speculative or context-specific. NO.