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Can you please explain using excel. Please show how I would be able to enter into excel myself. Thank you 1. Calculate the Average Return,
Can you please explain using excel. Please show how I would be able to enter into excel myself. Thank you
1. Calculate the Average Return, Standard Deviation, Combining 2 asset classes (return and Standard Deviation), Correlation Year Rate of Return% 1 11 2 12 3 -6 -5 4 5 6 6 2 5 7 Average= St Dev= p. (RoR- (ROR- Rate of Return % P.RoR AvgROR)^2 AvgROR) ^2 -10.00% Economic Probability Scenario % Recession 25.00% Normal 50.00% Boom 25.00% Total 100.00% 12.00% 25.00% Average=1 Variances St Dev PORTFOLIO ANALYSIS (Asset Allocation) Asset Allocation Weights (W%) Stocks (Ws) = 50% Bonds (Wb) 50% ROR % Scenario (S) Probability (p) p*rs % Deviation Square for Exp. Deviation Ret. (SD) (Dev.) Dev^2 p * SD Recession (SI) Normal (Sn) Boom (Sb) 35.0% 40.0% 25.0% 100.0% Quest 5 % Variance Quest 6 COVARIANCE & CORRELATION Stocks Bonds (Deviatio (Deviatio Ds * Db n from n from the mean) the mean) Covariance [p * (Ds*Db) Covariance Correlation coefficient =Step by Step Solution
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