金融学概论讲义(北大光华管理学院)lecture04.docVIP

Principles of Finance Lecture 04 Portfolio Theory Probability Distribution of Returns ( Returns on investment are uncertain (risky) ( We model uncertainty of future returns using Expected return: the return you expect to receive on average Volatility (standard deviation): degree of dispersion of future returns The larger a stock’s volatility, the wider the range of possible outcomes and the larger the probabilities of those returns at the extreme of the range  Expected Return : Expected rate of return for investment : Probability of occurrence of ith state : Estimated rate of return for