Mean, Variance, and Normal Distribution

Mean and variance are essential statistical measures in finance. The mean represents the expected return, while the variance represents the volatility of returns. The normal distribution is commonly used to model financial returns, and understanding its properties is crucial for risk and return analysis.

Mean and Variance

The mean provides a measure of the central tendency of a data set, indicating the average value. In the context of financial returns, it represents the average return of an investment.