(PDF) Empirics of Standard Deviation
Added on 2021-02-18
9 Pages2160 Words84 Views
FINANCE
TABLE OF CONTENTSEXECUTIVE SUMMARY.............................................................................................................11. Calculate Expected rate of return and standard deviation.......................................................1Standard deviation.......................................................................................................................12. Calculation of Risk to reward ratio as measurement of risk...................................................23. Calculation of expected rate of return with context of Capital asset pricing model...............2Downsides and DCF: Valuing Biased Cash flow forecasts........................................................3REFERENCES................................................................................................................................6
EXECUTIVE SUMMARYThe main objective of investment should be concerned by referring portfolio's optimalstructure along with its weight, probability, funds return and various other measures. The presentreport would be conducting an analysis of Charlotte Lynch case as an analyst of an investmentorganization. In this report, it includes various states of economy as rapid expansion, modestgrowth, no growth and recession. Its analysis will be prepared by appropriate calculations of expected rate of return withreference to standard deviation. There is an extraction of risk reward ratio of specified funds withcontext of standard deviation as measure of risk. In this analysis, there is a removal of returnwith context of Capital asset pricing model. It has been clarified in this report that its risk reward ratio is not matching the ideal ratioas it is considered as the risky portfolio. In other parts, it has stated a brief interpretation ofjournal with topic of Downsides and DCF that had valued biased project of cash flow.1. Calculate Expected rate of return and standard deviationCodeState ofeconomyProbabilityFund returnWeightReturnWeight *Return1Rapidexpansion10.00%50.00%0.10.50.052Modestgrowth50.00%35.00%0.50.350.1753No growth35.00%5.00%0.350.050.01754Recession5.00%-100.00%0.05-1-0.05100.00%1Expected ReturnW1R1 + W2R2 +W3R3 + W4R40.05 + 0.175 + 0.0175 +-0.050.192519.25%Standard deviationStandard Deviation1
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