Ask Experts Questions for FREE Help !
    gisellemilyn's Avatar
    gisellemilyn Posts: 1, Reputation: 1
    New Member

    Sep 14, 2014, 07:58 AM
    Calculate average return and standard deviation
    You are considering whether to invest in Bluestar shares only or diversify your investment portfolio by including Singnet, an exchange traded fund.

    You have extracted the following historical data from the internet below:

    Year Ended
    31 Dec Bluestar ($) Singnet ($)

    2008 0.8 1.83
    2009 1.01 2.89
    2010 1.18 3.19
    2011 0.94 2.65
    2012 1.15 3.23
    2013 1.35 3.13

    Calculate the average return and standard deviation for
    (I) Bluestar
    (ii) Singnet and
    (iii) a portfolio consisting 50% of Bluestar and 50% Singnet

    I got a problem trying to solve Part (iii) . I got a negative value when trying to calculate the standard deviation hence got an error when square root the answer. Can anyone tell me why? Please... thanks..

    My ans to Part (I) is 1.07 for average return and 0.2 for standard deviation. For Part (ii) is 2.82 for average return and 0.53 for standard deviation.

    Can anyone enlighten me which part I have done wrong? I have checked my calculations many times but still can't get which part is wrong. I need to hand in this assignment in 3 days time :'(
    ArcSine's Avatar
    ArcSine Posts: 969, Reputation: 106
    Senior Member

    Sep 15, 2014, 09:51 AM
    Your avg and stdev calcs for the individual securities are fine. You'll need to post your steps in the blended portfolio calcs in order to debug it.

Not your question? Ask your question View similar questions


Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.

Check out some similar questions!

The expected rate of return and standard deviation [ 1 Answers ]

Suppose an investor invests 75% in the tangency portfolio and 25% in the riskless asset. What is the expected rate of return and standard deviation of this portfolio? If the investor has $100,000, how much will he invest in Risky Asset 1, Risky Asset 2 and riskless asset?

How to calculate the standard deviation STD ? [ 1 Answers ]

3 students are randomly selected with replacement from this data set, and we are interested in the probability that a student attends XUniversity. If you were to create a probability distribution, i.e. P(k=0), P(k=1), P(k=2), P(k=3), what would the standard deviation be of this distribution? ...

Calculate the standard deviation [ 1 Answers ]

Hey, A company has moved to new premises and the management have reason to believe that the number of internal telephne calls will increase. At the old premises the daily number of calls could be described by a normal distribution with a mean of 110. For 5% of the days, the number of calls was...

Expected return - Standard deviation [ 3 Answers ]

Returns Probability--Investment A-------Investment B----------Investment C 0.1... -22.00%... -13.00%... -10% 0.2... -2.00... 1.00... 2.00 0.4... 20.00... 15.00... 12.00 0.2... 35.00... 29.00... 20.00 0.1... 50.00... 43.00... 38.00 1. Find the expected return for each...

View more questions Search