Is it important to have the portfolio standard deviation formula memorized and to be able to derive covariance from a set of numbers? Schweser has numerous example in the qBank which cannot possibly be calculated within 90 seconds. Any feedback would be great as I’d like to be efficient with my time the next few weeks.
i think this is pretty central to portfolio management and I could probably do a normal portfolio sd calulation in about 90s. That said, the sort of question you would probably get in the exam is more likely to ask what happens to s.d. if you increase the weighting of a risk free asset or something quasi-mathematical like that
you can calculate the standard deviation in your BA II plus in less than 20 seconds. Search the instruction manual at statistics and you will see. Alex.
neagu.alexandru Wrote: ------------------------------------------------------- > you can calculate the standard deviation in your > BA II plus in less than 20 seconds. Search the > instruction manual at statistics and you will > see. > > Alex. sorry, but that’s waste of time. focus on concepts and understand relationships.
------------------------------------------------------- > Is it important to have the portfolio standard > deviation formula memorized and to be able to > derive covariance from a set of numbers? hi, I guess it wouldn’t make much sense to ask you to calculate covariance. But a formula like Var(X+Y) = Var(X) + Var(Y) + 2 x Cov(X,Y) shouldn’t be too complicated to memorize.