Concept
Version 5
Created by Boundless
Variance
How much do investors want to pay to have to take the good with the bad?
Calculating variance is a 3 step process once expected return has been calculated. Calculate deviations from mean (blue), square the deviations (yellow), multiply the squared deviation by its original probability (orange). Get brownie points by taking the square root of that number and interpret its meaning in the form of a sentence.
Source
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