Question

Finance Investment course question

The question below is already answered , please answer it in a more simple way or explain how the columns where calculated in steps as I don't understand how did we calculate column 4 and 5 and 7 as well as I don't understand why did we divide by 5 when we calculate OMI?

Answer 1

Variance, Standard deviation and Covariance are calculated wrongly in solution provided by you as rather taking "n" as 5 its should be taken as 6.

Correct Standard deviation, Variance, Correlation and Beta is provided.

289 Page No.: Toller Ig-dashe 3 6 As the sunsue is already computed I will provide - you the formules or Steps to celem kaip things asked by you. (7) Year RA Deviation of RARA -EIRA) TRA-EIRA) ² 13- 6.33. = 6.67 (6.6+)² - 44.44 9- 6.33 = 2.67 (2.67)2 = 711 - 11- 6.33 =-17.33 |-17.33)= 300.44 lo- 6.33 - 3.67 (3.67)2 = 13.44 11- 6.33 -4.67 1 14.67) 2 =21.78 6-633 = -0.33 1-0.33) = 0.11 Totel ERA=38 E[RA-EIRA/ 387.33 Expected Return of RA = SRA = 38 = 6.3133 u R na nood years. (7) Maulut (2) Deviation of R R-EIR] (R-ELR) ² 17-11.33 = 5-67 (5-67) 2 = 32.11 15-11.33 - 3-67 13.67)2 = 13.44 6-11-33 =-5-33 (-5-33)² = 28.44) 8-16 33 = -3.33 (-3.33)² =11.14 lo- 11.33 =-1.33 12-11:33 = 0.67 Totel ER= 68 Evepested hetund Mailer, & ELR) - FR na noid years. = 68 - 11:33

Standard neuotion au calentited wrogly, botas n should tahu 6 rathas. Variance [R-S1RJ2 = 87.33 - 14.555. & Machet Stand and Devletion - Vanares SD q Market = /14.555 2 283.82 Variance of - ECR-EIRA)]2 = 387.33 RA - = 64.555 S DO RA = √64.555 = 8.03 Covariance is calculeted wrongly. Covariance = 121.33 -20.22 Correletion - Conaniance Marleet GRA 0.66 - 20.22 (8.03) (3.82) - P Beta a RA = Covaniance = omanket) 1:3893 20.22 (3.8272 -

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