The return on a risky asset is an example of a random variable, a quantity whose outcomes are uncertain. For example, a portfolio may have a return objective of 10 percent a year. The portfolio manager’s focus at the moment may be on the likelihood of earning a return that is less than 10 percent over the next year. Ten percent is a particular value or outcome of the random variable “portfolio return.” Although we may be concerned about a single outcome, frequently our interest may be in a set of outcomes: The concept of “event” covers both.