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  • Risk and Return Calculation

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    Zhieh Lor
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    This document describes a portfolio with two stocks, A and B, that have weights of 0.4 and 0.6 respectively. It lists the possible states of the economy and the associated probabilities and returns for each stock. It then calculates the average return, variance, and standard deviation for each stock, as well as the return, covariance, correlation, variance and standard deviation for the overall portfolio.

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    calculation

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    Risk and Return calculation

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    This document describes a portfolio with two stocks, A and B, that have weights of 0.4 and 0.6 respectively. It lists the possible states of the economy and the associated probabilities and returns for each stock. It then calculates the average return, variance, and standard deviation for each stock, as well as the return, covariance, correlation, variance and standard deviation for the overall portfolio.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    19 views1 page

    Risk and Return Calculation

    Uploaded by

    Zhieh Lor
    This document describes a portfolio with two stocks, A and B, that have weights of 0.4 and 0.6 respectively. It lists the possible states of the economy and the associated probabilities and returns for each stock. It then calculates the average return, variance, and standard deviation for each stock, as well as the return, covariance, correlation, variance and standard deviation for the overall portfolio.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    of 1

    2 Stocks

    A
    B

    400.00
    600.00
    1,000.00

    Weight (W)
    0.4
    0.6
    1.00

    State of Economy

    Probability

    Recession
    Normal
    Boom

    0.2
    0.3
    0.5

    Return
    A
    16%
    18%
    22%

    Return
    B
    22%
    20%
    20%

    A
    19.60%
    0.000624
    0.024980

    B
    20.40%
    0.000064
    0.008000

    Investment
    Investment
    Total Investment

    Each Stock
    Avg Return
    Variance
    Std Deviation
    Portfolio
    Return
    Covariance
    Correlation
    Variance
    Std Deviation

    0.2008
    -0.000144
    -0.7205766921
    0.00005376
    0.0073321211

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