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How do we measure the risk of a financial security?
In this video Prof Pasquale Scaramozzino explores the use of probability distribution to compute mean and expected returns.
The modern approach to financial risk takes the view that any investment in financial securities is associated with an uncertainty about its outcome.
While we can’t predict with certainty the actual return from an investment, we can describe the uncertainty about the likely outcomes. In this video Prof Pasquale Scaramozzino explores how we can compute mean and expected returns using probability distribution.
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