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    Revv Cojuangco
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    This document calculates the coefficient of variation (CV) for a portfolio with an expected annual return of 15% and a standard deviation of 37.081%. The portfolio has a range of possible returns from -60% to 90% with assigned probabilities. The CV is a measure of risk that divides the standard deviation by the expected return. For this portfolio, the CV equals 2.4721, indicating high risk relative to the expected return.

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    This document calculates the coefficient of variation (CV) for a portfolio with an expected annual return of 15% and a standard deviation of 37.081%. The portfolio has a range of possible returns from -60% to 90% with assigned probabilities. The CV is a measure of risk that divides the standard deviation by the expected return. For this portfolio, the CV equals 2.4721, indicating high risk relative to the expected return.

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    17 views1 page

    Book 5

    Uploaded by

    Revv Cojuangco
    This document calculates the coefficient of variation (CV) for a portfolio with an expected annual return of 15% and a standard deviation of 37.081%. The portfolio has a range of possible returns from -60% to 90% with assigned probabilities. The CV is a measure of risk that divides the standard deviation by the expected return. For this portfolio, the CV equals 2.4721, indicating high risk relative to the expected return.

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    Download as XLSX, PDF, TXT or read online from Scribd
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    of 1

    5 C

    CV = Standard deviation/Expected return


    Expected r = 0.1(-60%) + 0.2(-10%) + 0.4(15%) + 0.2(40%) + 0.1(90%)
    = 15%'
    = [0.1(-60% - 15%)2 + 0.2(-10% - 15%)2 + 0.4(15% -15%)2
    + 0.2(40% - 15%)2 + 0.1(90% - 15%)2]^(1/2)
    = 1,375^(1/2)
    = 37.081%
    CV = 37.081%/15% = 2.4721

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