In Considering the Purchase of a Certain Stock, You Attach

Essay

In considering the purchase of a certain stock, you attach the following probabilities to possible changes in the stock price over the next year. $$\begin{array} { | l | l | } \hline \begin{array} { l } \text { Stock Price Change During } \\\text { Next Twelve Months } ( \% )\end{array} & \text { Probability } \\\hline + 15 & 0.2 \\\hline + 5 & 0.3 \\\hline 0& 0.4 \\\hline - 5 & 0.05 \\\hline - 15 & 0.05 \\\hline\end{array}$$ What is the expected value, the variance, and the standard deviation? Which is the most likely outcome? Sketch the cumulative distribution function.