NPV and other criteria for Capital Budgeting

What if you are an insider and have special

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Unformatted text preview: sk: Risk: what are the chances I will lose money (chance I have negative rate of return). Likelihood stocks value will be volatile is another way to think about it Can also think about it in terms of risk asset will go bankrupt Sample variance = sum of squared deviations from mean divided by N- 1 Google “Bessel’s Correction” for why N- 1 rather than N Variance (find average of samples taken, then square differences between mean and each individual point, add those squares up, then divide by N- 1 (number of observations – 1) measure of volatility Standard deviation = the square root of the variance A particular distribution of results which has elegant math is called a normal/bell- curve distribution 68% of results fall within +/- 1 standard deviations on...
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