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Chapter 5: Measuring Risk–Introduction

Chapter 5: Measuring Risk–Introduction

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Chapter 5: Measuring Risk—Introduction page 3 LRT . (5.6) For our example, URT=32% and LRT=-12%. The top panel of Figure 5.1 shows the probability distribution of the returns with =10% and =22%, and marks these confidence bounds. The probability distribution for the stock price is different from the distribution of returns

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