paxcurrent.blogg.se - When to use weighted standard deviation

HPR (Recession) = ((4-93)+2)/93 = -93.55%Įxpected Return=(Probability of Boom * Return from Boom) + (Probability of Normal * Return from Normal) + (Probability of Recession * Return from Recession)

HPR (Recession) = ((38-28) + 5)/28 = 53.57%Ĭalculation of Expected Return of Company AĮxpected Return = (Probability of Boom * Return from Boom) + (Probability of Normal * Return from Normal) + (Probability of Recession * Return from Recession).

HPR = ((End of Period Value – Original Value) + Income) / Original Value) * 100

(c) Calculate the standard deviation of the portfolio if half of the investment is done in Company A and the rest half in Company BĬalculations of Holding Period Return (HPR) (b) Calculate the standard deviation of Company B (a) Calculate the standard deviation of Company A The common stock of Company B sells for $ 93 per share and the same offers following payoffs for the next year:

The common stock of Company A sells for $ 28 per share and the same offers following payoffs for the next year Standard deviation in the case of two companies in the portfolio

Standard Deviation will be Square Root of Variance Expected Return = (Probability of Boom * Return from Boom) + (Probability of Good * Return from Good) + (Probability of Normal * Return from Normal) + (Probability of Recession * Return from Recession)