Calculate the expected return, variance, and standard deviation for a portfolio of four equally-weighted stocks with...
Calculate the expected return, variance, and standard deviation for a portfolio of four equally-weighted stocks with returns of 26.4%, -9.2%, 2.9%, and 22.0%.
Homework Answers
| YEAR | RETURN | (X -Average Return of X)^2 |
| 1 | 26.4 | 252.015625 |
| 2 | -9.2 | 389.075625 |
| 3 | 2.9 | 58.140625 |
| 4 | 22 | 131.675625 |
| Total | 42.1 | 830.907500 |
| Average Return = | Total Return / NO of years | |
| 42.1/4 | ||
| 10.525 | ||
| Variance = | sum of (X -Average Return of X)^2 / no of years | |
| 830.9075 / 4 | ||
| 207.726875 | ||
| Standard Deviation = | Square root of Variance | |
| Square root of 207.726875 | ||
| 14.41 |
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