32 Frequently Asked Questions In Quantitative Finance
forSnapproaches that for the standardized normal
distribution.
In the next figure is the distribution for the above coin-
tossing experiment.
In the figure after is what your total profit will be like
after one thousand tosses.
Your expected profit after one toss is
1
6
× 10 +
5
6
×(−1)=
5
6
≈ 0. 833.
Your variance is therefore
1
6
×
(
10 −
5
6
) 2
+
5
6
×
(
− 1 −
5
6
) 2
=
605
54
,
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
-1012345678910
Figure 2-1:Probabilities in a simple coin-tossing experiment: one
toss.
