Theory of probability distributions
The expected return (or expected gain) on a financial investment is the expected value of its return (of the profit on the investment). It is a measure of the center of the distribution of the random variable that is the return. It is calculated by using the following formula: where is the return in scenario ; is the probability for the return in scenario ; and is the number of scenarios. The expected rate of return is the expected return per currency unit (e.g., dollar) invested. It is computed as the expected return divided by the amount invested. The required rate of return is what an investor would require to be compensated for the risk borne by holding the asset; "expected return" is often used in this sense, as opposed to the more formal, mathematical, sense above. (Wikipedia).
Arithmetic (mean) versus geometric (median) stock return
The expected return of a stock is ambiguous because, if we assume returns are normal, then price levels are lognormal. In which case, the mean does not equal the median future stock price.
From playlist Intro to Quant Finance
Expected Value Example and Intuitive Explanation
Please Subscribe here, thank you!!! https://goo.gl/JQ8Nys Expected Value Example and Intuitive Explanation
From playlist Statistics
Using Normal to bound future stock price interval
I show an application of the normal distribution: to bound a future stock price interval
From playlist Statistics: Distributions
Expected Value: Life Insurance
This video explains how to calculate an expected value of an event. http://mathispower4u.com
From playlist Probability
FRM: Intro credit risk: expected loan return
The expected return on a loan adjusts for default risk. If p = probability of repayment, then 1-p = probability of non-repayment. The expected non-repayment, E[loan amount*(1-p)], is an expected loss (EL) covered by loan loss provisions (a contra-asset account). A "cost of doing business"
From playlist Credit Risk: Introduction
Annual Rate of Return Need for Loss Recover and Additional Return on Investment
This video explains what rate of return is needed to recover from a loss as well as the rate of return needed to earn a certain rate of return moving forward. https://mathispower4u.com
From playlist Finance: Simple and Compounded Interest
Expected Value of the Bernoulli Distribution | Probability Theory
How do we derive the mean or expected value of a Bernoulli random variable? We'll be going over that in today's probability theory lesson! Remember a Bernoulli random variable is a random variable that is equal to 1 (success) with probability p and equal to 0 (failure) with probability 1-
From playlist Probability Theory
Determine the Total Return of an Investment as Percent
This video explains how to calculate the total return on an investment as a percent. http://mathispower4u.com
From playlist Finance: Simple and Compounded Interest
Diversification in Investing: Response to Meet Kevin, Kevin O'Leary, Graham Stephan.
#KevinOLeary #GrahamStephan #Response #MeetKevin Today's video is a response to a viewer question about a comment financial YouTuber "Meet Kevin" made on diversification in his reaction to a video where Kevin O'Leary recommended that Graham Stephan diversify his investment portfolio. We wi
From playlist Statistics For Traders
Policy Gradient Theorem Explained - Reinforcement Learning
In this video, I explain the policy gradient theorem used in reinforcement learning (RL). Instead of showing the typical mathematical derivation of the proof, I explain the resulting formula by walking through an example of playing a game and figuring out how we can estimate the policy gra
From playlist Machine Learning
4. Portfolio Diversification and Supporting Financial Institutions (CAPM Model)
Financial Markets (ECON 252) Portfolio diversification is the most fundamental concept of risk management. The allocation of financial resources in stocks, bonds, riskless, assets, oil and other assets determine the expected return and risk of a portfolio. Taking account of covariances
From playlist Financial Markets (2008) with Robert Shiller
MIT 15.401 Finance Theory I, Fall 2008 View the complete course: http://ocw.mit.edu/15-401F08 Instructor: Andrew Lo License: Creative Commons BY-NC-SA More information at http://ocw.mit.edu/terms More courses at http://ocw.mit.edu
From playlist MIT 15.401 Finance Theory I, Fall 2008
Applied Portfolio Management - Class 1 - Risk & Return
All slides are available on my Patreon page: https://www.patreon.com/PatrickBoyleOnFinance Book Suggestions: Burton Malkiel, A Random Walk Down Wall Street (2007) https://amzn.to/2Hr2SW1 Roger Lowenstein, Buffett: The Making of an American Capitalist (2008) https://amzn.to/3hUkFl6 Jack Sc
From playlist Applied Portfolio Management
This is Lecture 17 of the COMP510 (Computational Finance) course taught by Professor Steven Skiena [http://www.cs.sunysb.edu/~skiena/] at Hong Kong University of Science and Technology in 2008. The lecture slides are available at: http://www.algorithm.cs.sunysb.edu/computationalfinance/pd
From playlist COMP510 - Computational Finance - 2007 HKUST
Capital asset pricing model (CAPM, FRM T1-9)
The CAPM is a ex ante single-factor model where the single-factor is the market's excess return: it says that we should expect an excess return that is proportional to the stock's beta, which is the stock's exposure to market's excess return, as measured by the stock's beta. Beta can be re
From playlist Risk Foundations (FRM Topic 1)
Ses 15: Portfolio Theory III & The CAPM and APT I
MIT 15.401 Finance Theory I, Fall 2008 View the complete course: http://ocw.mit.edu/15-401F08 Instructor: Andrew Lo License: Creative Commons BY-NC-SA More information at http://ocw.mit.edu/terms More courses at http://ocw.mit.edu
From playlist MIT 15.401 Finance Theory I, Fall 2008
This video introduces and provides 2 examples of expected value. http://mathispower4u.com
From playlist Probability
DeepMind x UCL RL Lecture Series - Multi-step & Off Policy [11/13]
Research Scientist Hado van Hasselt discusses multi-step and off policy algorithms, including various techniques for variance reduction. Slides: https://dpmd.ai/offpolicy Full video lecture series: https://dpmd.ai/DeepMindxUCL21
From playlist Learning resources