1

Expected Returns
Normal 16% 65% 10.40% Expected Return on Stock
Boom 24% 25% 6.00% 15.10%
Recession -13% 10% -1.30%

2 Over the past 3 years an investment returned

21.25%, −15.25%, and 18.25%. What is the variance Variance
of returns? 0.0273722222222222
Average Return 0.0808333333333333

3
1 (Year) 2 (Year) 3 (Year) 4 (Year) Standard Deviation of Returns
20% -11% -14% 17% 0.155724115023974

4 Return R - Mean R R - Mean Return ^2

2018 20.36% -4.92% 24.2064
2019 25.24% -0.04% 0.0016 Variance of Return of Alpha
2020 30.24% 4.96% 24.6016 16.26986667
Total 75.84% 48.8096

Mean Return 25.28%

5 Return R - Mean R R - Mean Return ^2 Standard Deviation of Portfolio

1 10.44% -10.33% 106.7089 7.98330132213485
2 15.88% -4.89% 23.9121
3 26.32% 5.55% 30.8025
4 30.44% 9.67% 93.5089
Total 83.08% 254.9324

Mean Return 20.77%

Standard Deviation of Portfolio 63.7331
 viation of Returns
24115023974

ance of Return of Alpha

16.26986667

ard Deviation of Portfolio

7.98330132213485