What is the expected value and standard deviation of value


Let the random variable R denote the rate of return on an asset. R has the following pdf.

R P(R=r)

.3 .1

.2 .1

.1 .15

0 .15

-.1 .20

-.2 .25

-.3 .05

a. What is the expected value and variance of R?

b. You are considering investing $100 in this asset. After 1 year, the value will be $100(1+R). What is the expected value and standard deviation of the value of your asset in 1 year?

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Basic Statistics: What is the expected value and standard deviation of value
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