Using the Following Sampling Distribution, Directly Recalculate the Mean and Standard

question 8

Essay

Using the following sampling distribution, directly recalculate the mean and standard deviation of $\bar { X }$ . $$\begin{array} { | c | c | c | c | c | c | } \hline \bar { x } & 1.5 & 2.0 & 2.5 & 3.0 & 3.5 \\\hline p ( \bar { x } ) & 1 / 6 & 1 / 6 & 1 / 6 & 1 / 6 & 1 / 6 \\\hline\end{array}$$

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Definitions:

Risk-free Asset

A financial instrument that is considered to have no risk of financial loss, typically issued by a government.

Sharpe Measure

A method to evaluate the risk-adjusted return of an investment, comparing portfolio excess return to the standard deviation of the portfolio.

Excess Returns

The return on an investment above the return expected from risk-free investments or the market's benchmark.

Risk-free Asset

An investment that is assumed to have no risk of financial loss, often exemplified by government bonds.