 Ask Remember Me? gisellemilyn Posts: 1, Reputation: 1 New Member #1 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 Posts: 969, Reputation: 106 Senior Member #2 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.

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