<t>Thanks a lot.I guess another related question is...If I want to express say returns as a function of a random variable and knowing that returns are normally distributed, why is Ri = mean + standard deviation × φ.why not anything something else like Ri = mean + ((standard deviation)^2) × φ.May be ...

If X is normally distributed with means 0 and standard deviation = 1, then I understand that E[X] =0.Can someone please explain why E[X^2] =1?Thanks,