Post by: QuantumJG on April 01, 2010, 08:42:44 pm
There is an assignment question asking for you to calculate the standard deviation of the investor's portfolio, but, there is no formula!
How do I do this?
Post by: dcc on April 01, 2010, 08:45:52 pm
Post by: Cthulhu on April 01, 2010, 08:47:03 pm
Here is a helpful page on calculating the standard deviation
Post by: QuantumJG on April 01, 2010, 08:48:19 pm
Oh thanks, but its not the formula I'm looking for.
Post by: /0 on April 01, 2010, 08:49:37 pm
(Still, the other formula seems to be computationally simpler, why not use it?)
Post by: dcc on April 01, 2010, 08:56:30 pm
Post by: Edmund on April 01, 2010, 09:05:24 pm
What you need to do now is find and sub in the individual standard deviations as well as the weighted averages you previously found and read off the correlation figures from the table few pages back. This allows you to find the standard deviation of the whole portfolio.
Really have to run off now, friend arrived to pick me up ;)
If I come back drunk, I'll look at it tomorrow ;D