# Finance Midterm #2

 The flashcards below were created by user tgrldy2026 on FreezingBlue Flashcards. Systematic Risk the failure of one company leads to the failure of others, ths risk can't be diversified away. Risk the potential for unexpected events to occur. risk aversion the tendency to avoid additional risk. risk-return relationship most people will demand a higher rate of return if there is a higher risk. uncertainty chance, or probability, of an unexpected outcome. expected return the mean of the probability distribution of possible outcomes. risk tolerant more willing to take on risk. What does standard devieation indicate? the likelihood that an outcome different from what's expected will occur. standard deviation a numerical indicator of how widely dispersed the possible values are around a mean. more dispersed = higher std. dev. = more risk Expected Value (Mean) Equation mu = Sum(V x P) Standard Deviation Formula sigma = SQRT[Sum P(V - mu)2] Authortgrldy2026 ID111144 Card SetFinance Midterm #2 DescriptionSJSU BUS 170 Finance midterm #2 Updated2011-10-22T21:46:45Z Show Answers