lly Advisers, Inc., has determined four possible economic scenarios and has projected the portfolio returns for two portfolios for their client under each scenario. Tullys economist has estimated the probability of each scenario, as shown in the table below. Given this information, what is the standard deviation of expected returns on portfolio B? A) 9.51%. B) 12.55%. C) 8.35%. D) 4.34%. The correct answer was D) 4.34%. For the tables, you have to see schweserpro as I am not able to copy the table here. In the answer, they have calculated P * [RB E(RB)]^2 … is this correct, someone please confirm and see their calculations as well!
Similar problem in q no. 1669 as well. In the solution, they have given (R 6.175%)^2 and I can’t understand where does this term come from and the calculations where they calculate the terma in this particular column!
anupamjain008 Wrote: ------------------------------------------------------- > Similar problem in q no. 1669 as well. > > In the solution, they have given (R 6.175%)^2 and > I can’t understand where does this term come from > and the calculations where they calculate the > terma in this particular column! Both solutions are correct (problem 1417 & 1669). to determine standard deviation first of all you need to find value of variance. variance = ((Return - average return)^2)/n in problem 1669 average return = 6.175 in problem 1417 variance= probablity * (Return - average return)^2 after that take square root of variance
I got the answer after almost 5 minutes of tenuous calculations… its routine although pretty lengthy. My Q is, would they ask us such queries in the exam , ones that are rather straightforward albeit 'too lengthy" ?