stock portfolio

stock portfolio - 1 Calculation of expected return Stock...

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1Calculation of expected return Scenario Stock Fund Bond Fund (1)*(2) (1)*(3) Recession 0.3 -11 -3.3 16 4.8 Normal 0.4 13 5.2 6 2.4 Boom 0.3 27 8.1 -4 -1.2 Expected mean or return 10 6 2Caluculation of variance Stock Fund Bond Fund Scenario (1)*(4) (1)*(5) Recession 0.3 -11 -21 441 132.3 16 10 100 30 Normal 0.4 13 3 9 3.6 6 0 0 0 Boom 0.3 27 17 289 86.7 -4 -10 100 30 Variance = 222.6 Variance = 60 Probability (1) Rate of return (2) Rate of return (3) Prob. (1) Rate of return (2) Deviation from expected return Squared Deviation (4) Rate of return (3) Deviation from expected return Squared Deviation (5)
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1, Calculate portfolio return in each scenario stock : 60% bond: 40% Scenario Rate of return (bond) Recession -11 16 Portfolio return in recession = -0.2 Normal 13 6 Portfolio return in normal = 10.2 Boom 27 -4 Portfolio return in boom = 14.6 2, Calculate performance of the portolio Portfolio of 60% in stocks and 40% in bonds Scenario (1) Probability (2) Rate of return (1)*(2) Deviation from expected return (3) Squared Deviation (1)*(3) Recession 0.3 -0.2 -0.06 -8.6 73.96 22.188
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stock portfolio - 1 Calculation of expected return Stock...

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