Mean and variance Two distributions with the same Probability variance and different means Random Variable values
Mean and Variance Probability Random Variable Values Two distributions with the same variance and different means
Mean and variance Two distributions with the same Probability mean and different variances Random Variable values
Mean and Variance Probability Random Variable Values Two distributions with the same mean and different variances
Preferences over Risky assets Higher mean return is preferred Less variation in return is preferred (less risk)
Preferences over Risky Assets Higher mean return is preferred. Less variation in return is preferred (less risk)
Preferences over Risky assets Higher mean return is preferred Less variation in return is preferred (less risk) Preferences are represented by a utility function U(μ,σ) U个 as mean returnμ个 U↓ as risk o个
Preferences over Risky Assets Higher mean return is preferred. Less variation in return is preferred (less risk). Preferences are represented by a utility function U(,). U as mean return . U as risk
Preferences over Risky assets Mean return, H Preferred Higher mean return is a good Higher risk is a bad St Dev of return, o
Preferences over Risky Assets Preferred Higher mean return is a good. Higher risk is a bad. Mean Return, St. Dev. of Return,