The variance of return on an asset, when probabilities are given, is calculated using the formula: Var(R) = σR^2 = Σ [pi * (Ri - E(R))^2], where pi is the probability of outcome i, Ri is the return of outcome i, and E(R) is the expected return.

Authors

• Person: Not available Organization: CAUL
  Topic 2: The Risk and Return Trade Off in Financial Decision Making

Sources

• Topic 2: The Risk and Return Trade Off in Financial Decision Making oercollective.caul.edu.au CAUL via serper

Referenced by nodes (1)

• variance concept