Invested 10000

Current Value 50000

% change
P old 10000
p new 50000

HPR 400

Investment YEP YEP

10000 13790 18000
t=0 y1 y2

YOY return 37.9 30.52937

Average annual return 41.4636515993876
Holding period return 400
Average annual return 80

Another share has given annual return of 50% but the insdustry has given an average return of 30%
Good Better than industry
Bad Not the best in the industry

Investment YEP YEP

10000 13790 18000
t=0 y1 y2
Income 1000 2000
YOY return 47.9 45.03263
Average Annual Return 52.8976375795665

Formula 4
Year Annual return(YOY)
%
t1 12
t2 14
t3 11
t4 16
t5 14

AM = Average return 13.4

Historical Risk = SD 1.95

Max Return 15.35

Min Return 11.45

Comment:
The return will lie between the range of 11.45 - 15.35.
Wider the range, higher the risk
Narrower the range, lower the risk

FORMULA 5
Coefficient of variation

A company has four proposals for an investment

Which one is better?
% %
Proposal Expected Mean Risk(SD)
A 16 5.5
B 19 6
C 20 7
D 22 9.5

A 34.38%
B 31.58%
C 35.00%
D 43.18%

B Because it has lowest risk or lowest Co-efficient of variation

FORMULA 6
Investment YEP YEP
200 250 150
t=0 y1 y2
Income 150 154
YOY 100 21.6
Average Annual Return 72.76
Risk 65.65
COV
 Risk element is captured in the year
YEP YEP YEP
25000 25000 50000
y3 y4 y5

38.8888888888889 0 100

e insdustry has given an average return of 30%

YEP YEP YEP

25000 25000 50000
y3 y4 y5
3000 3000 1000
55.5555555555556 12 104
 *[11.45 - 15.35] is the risk range

owest Co-efficient of variation

YEP YEP YEP

300 320 350
y3 y4 y5
114 98 56
176 39.33333 26.875 Mean 72.76167
SD 65.6518
ent is captured in the year on year return formula