The probability distribution of the payoffs on an investment consists of a _____.
A)listing of all possible outcomes with a chance of occurrence assigned to each outcome
B)measure of the relationship of one investment with another investment
C)standardized measure of the risk per percentage return
D)listing of the degree of relationship between the probabilities of two payoffs
E)measure of the extent to which the payoffs move with the capital market

Question

The probability distribution of the payoffs on an investment consists of a _____. 
A)listing of all possible outcomes with a chance of occurrence assigned to each outcome
B)measure of the relationship of one investment with another investment
C)standardized measure of the risk per percentage return
D)listing of the degree of relationship between the probabilities of two payoffs
E)measure of the extent to which the payoffs move with the capital market

Quizplus · Accepted Answer

The probability distribution of the payoffs on an investment lists all possible outcomes with a chance of occurrence assigned to each outcome. This is how we determine the expected value and potential risk of an investment.

The Probability Distribution of the Payoffs on an Investment Consists