The probability distribution of the payoffs on an investment refers to a _____.
A) listing of all payoffs and then determining the chance that each payoff will occur
B) measure of the tightness, or variability, of a set of payoffs
C) standardized measure of the risk per payoff
D) listing of the degree of relationship between two payoffs
E) measure of the extent to which the payoffs move with the capital market

Question

Quizplus · Accepted Answer

The probability distribution of the payoffs on an investment refers to a listing of all payoffs and then determining the chance that each payoff will occur. It provides a systematic way of analyzing investment alternatives and helps investors make informed decisions based on the likelihood of different outcomes.

The Probability Distribution of the Payoffs on an Investment Refers