The Table Below Is the Probability Table for a Random

question 60

Short Answer

The table below is the probability table for a random variable X. Find E(X). $$\begin{array} { l | l l l l l l } \text { Outcome } & - 3 & - 2 & - 1 & 1 & 2 & 3 \\\hline \text { Probability } & 0.1 & 0.1 & 0.4 & 0.3 & 0.05 & 0.05\end{array}$$ Enter just a real number rounded off to two decimal places.

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Definitions:

Passive Investment

An investment strategy involving minimal buying and selling, aiming to benefit from long-term market returns with low fees.

Four-factor Model

A financial model that expands the three-factor model (market risk, size risk, and value risk) by adding a momentum factor to explain stock returns.

Fama and French Factors

Fama and French factors are three factors—market risk, size risk, and value risk—used in explaining portfolio returns beyond the market risk measured by beta.

Semistrong-form

A theory suggesting that stock prices incorporate all publicly available information, including historical data and public news.