Example 1: When you know the variable's distribution: A stock is expected to have annual returns according to the following distribution. Using this information, what is the expected return and standard deviation? Expected return = Standard deviation = The First Measurement of Risk - Standard Deviation continued Example 2: When you are using sample data: A stock has the following returns over the last five years. Using this information, what is the sample (arithmetic) average return and sample standard deviation? Sample ( arithmetic) average return = Sample standard deviation =