# 03 - Question and Problem Answers Chapter 3 Measuring...

This preview shows pages 1–2. Sign up to view the full content.

σ 2 E [ X E [ X ]] 2 σ 2 E [ X 2 2 X E [ X ] E [ X ] 2 ] σ 2 E [ X 2 ] 2 E [ X ] E [ X ] E [ X ] 2 σ 2 E [ X 2 ] 2 E [ X ] 2 E [ X ] 2 σ 2 E [ X 2 ] E [ X ] 2 Q . E . D . Question and Problem Answers page 1 Chapter 3- Measuring Portfolio Risk ± 3 - 1: Just expand the standard formula and regroup. This question should bring back fond memories of high school algebra. ± 3 - 2: To visualize the risk associated with these stocks we use the properties of the normal distribution: that an observation lies within one standard deviation of the mean 68% of the time, within two standard deviations of the mean 95% of the time, and within three standard deviations of the mean 99.7% of the time. Monthly Returns 2/28/05 to 2/28/06

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### Page1 / 2

03 - Question and Problem Answers Chapter 3 Measuring...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online