Lecture 8: Flashcards
(3 cards)
1
Q
What are the two main characteristics of return?
A
(Arithmetic) average return and standard deviation of a return
2
Q
What is arithmetic average return?
A
Measures what you expect to earn each period as things even out over time
3
Q
What is standard deviation of return?
A
Measures how far from the average you expect the return to be in one period
