3.2Investment Foundations · Mission 4
Why Diversification Changes the Question
Map return uncertainty, build a portfolio constellation, and see which shocks diversification can—and cannot—soften.
Your mission
Separate company-specific risk from market risk and explain why a diversified price-setting investor changes the risk question.
18–22 minutesFive guided missionsPortfolio Risk Diagnosis
Guided equity-risk lab
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OPS Guide
Expected return summarizes possible outcomes; variance describes how widely those possible returns spread around the expectation.
Inspect every possible return and reveal the expected return.
Mission 1 of 5 · Outcomes
Map return uncertainty
Possible return
A return that could occur under one future scenario.
Expected return
The probability-weighted average of the possible returns.
Variance
A measure of how widely possible returns spread around the expectation.
Inspect all three equally defined OPS scenarios. The probability-weighted expected return is 6%, but the actual one-year result can differ.
Inspect every possible return and reveal the expected return.
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