Calculate the expected return and standard deviation of a portfolio that is composed of 40 percent X and 60 percent Y when the correlation between the returns on X and Y is A) 0.5 B) -0.5Based on the information in the table below, calculate the expected return and standard deviation for each stock. Also, calculate the covariance and ... week lecture chapter risk and return problem sets question you’ve just decided upon your capital allocation for the next year, when you realize that you’ve In the previous chapter, we calculated the portfolio variance. While doing so, one of the key things we had to calculate was the standard deviation of each stock. Standard deviation as you may know, represents the volatility of the stock which is nothing but the risk associated with the stock. To calculate the standard deviation, we used the ...
Standard deviation is commonly used as a measure of investment risk, and is typically employed when calculating performance benchmarks like the Sharpe Ratio. Standard deviation describes the variability around the mean of an investment’s returns, with higher values indicating an investment whose returns have a large spread and hence a greater ... And in general, for many uses the standard deviation ends up luring one into a false feeling of understanding. For instance, if the distribution is anything but normal (or a good approximation thereof), relying on the standard deviation will give you a bad idea of the shape of the tails, when it is exactly those tails that you probably most ... 1. An investor can design a risky portfolio based on two stocks, A and B. The standard deviation of return on stock A is 20% while the standard deviation on stock B is 15%. The expected return on stock A is 20% while on stock B it is 10%. The correlation coefficient between the return on A and B is 0%. The expected return on the minimum
Calculate the expected rate of return and standard deviation of a portfolio half invested in Escapist and half in Leaning Tower of Pita. All three economic scenarios are equally likely to occur ...
The relative standard deviation of the zenith-angle-averaged normalized broadband forcing for 15 models-was 8% for particle radius near the maximum in this forcing (approx. 0.2 microns) and at low surface albedo. Somewhat greater model-to-model discrepancies were exhibited at specific solar zenith angles.
Jan 08, 2015 · 8) The expected return on MSFT next year is 12% with a standard deviation of 20%. The expected return on AAPL next year is 24% with a standard deviation of 30%. The correlation between the two stocks is .6. If James makes equal investments in MSFT and AAPL, what is the expected return on his portfolio.