THANK YOU, THANK YOU, THANK YOU!!!!!! I wish you were my teacher!!! This video explained it all versus the entire semester at my school when I learned nothing! I so appreciate your time in making this video. :)
Expected value of the return of the portfolio is 2.725%. Variance is 2.80%. Standard deviation is 16.73%. So the range is from -14.005% to 19.455% within 1 standard deviation.
Having a great portfolio management is really important because it will help you earn more returns from the stock market compared to when doing some guessing, you know you don't want to mess around with your investment capital
I advice anyone who wants to have a perfect portfolio should first invest in the hands of a pro so they can share their knowledge with you then maybe later on you start investing independently so you don't end up making my mistakes
Ferris Fitzgerald I can recommend Mr Rogan Colbert because I’ve been working with him for some time now with no complications. Connect with him at Roganfelixcolbert(ä)gmaïl•com
Finance is just plain boring, and that's coming from a professional trader of 12 years lol. I almost majored in finance but opted for business analytics and operations management instead.
Hi FinanceKid, i got an expected return of portfolio as 2.725% Variance of 0.02800 and SD of 0.16733. Please share your answer so that we can check if we understood the concept. looking forward to your valued response. Thanks for your informed video xoxo
is this the same as σ^ 2p = (wAσA)^2 + (wB σB )^2 + 2wAwB Cov(rA,rB ). It seems like it's leaving out the covariance part but the formula is confusing.
Thank you for explaining it clearly. But there's only one question that at 8:08 if the way you showed us is wrong, what's the right way to calculate it. Maybe the following example cannot explain this.
Greetings to you. I found this video really useful. I tried the last question at the end of the video. If you have the answers please let me know. I want to compare with my answers. I really need to master this. Looking forward to your response.
Hey man... Could really do these table in my exam( time limits) please make another video for future students to be able to do it from basic maths principals.... Thank you though 🏂
why in example 2 you find averge return for each stock then multiple it by weight of each return while in example 4 you multiple the weight by return then the result multiplied by the probability of each state which is opposite of example 1
He was merging the expected returns for each stock in each of the assets, which are Boom, and bust. He was simplifying their portfolio. Nevertheless, my question is, why did he use 1/3 as the weight portfolio for example two?
Excellent presentation. One question, how the return of the stocks is determined under each state of economy? Ex, using historical data or other assumptions. Thank you for teaching
Thanks for the great video, its very helpful. Anyway, in calculating portfolio variance if the correlation was minus, shall we remove the minus? Thanks b4, found it in an example of valuation books and it kinda confusing
Damodaran calculates the variance of a portfolio with the deviation of the actual returns from the expected return. What is the difference with this version? Thanks.
Frank, good job. But in determining the expected return of the portfolio, we mutliply by probabilities, and same even when getting the variance? I feel we have over used the probabilities 😃
Suppose a company has a beta of 1.5, and the market return is 10% on 1-year treasury bills which offers 6% hat is the expected return evaluate the answer... please help to find the answer
How to calculate this Question ?1. Mrs. Suzan thinks about investing her money in the stock market. She has the following two stocks in her mind: Stock “A”, and stock “B”. She knows that the economy can either go in recession or it will boom. Being an optimistic investor, she believed the likelihood of observing an economic boom is 65%. In addition she believed that stock A might perform less, thus she decided to allocate 35 % of her investment resources on this stock. You also know the following about your two stocks: State of economy Probability RA RB Boom 25% 4% Recession 4% 15% A. Calculate the expected returns for stock A and stock B B. Calculate the portfolio return C. Calculate the risk (standard deviation) for stock A and for stock B D. Calculate the covariance between stock A and stock B. E. Calculate the correlation between stock A and stock B. F. Calculate the variance of the portfolio G. Calculate the standard deviation of the portfolio H. Interpret the results of coefficients of correlation and justify weather there is diversification or not.
Dear friends, the XYZ company have multiple child companies, I can see each child company is "product" in the product portfolio. How can I define return or risk of each company?. Thanks.
i am so happy i have Sir Reed Cooper handling my investment,thanks to him am making more profit under him i thank God there are people like this in the world
THANK YOU, THANK YOU, THANK YOU!!!!!! I wish you were my teacher!!! This video explained it all versus the entire semester at my school when I learned nothing! I so appreciate your time in making this video. :)
Expected value of the return of the portfolio is 2.725%. Variance is 2.80%. Standard deviation is 16.73%. So the range is from -14.005% to 19.455% within 1 standard deviation.
😂😂😂
before i wrote my test today i decided to watch this video and a similar question came up... Thank you so much for the upload
By far the best video on calculating the expected returns and variances! Thank you for posting this
Having a great portfolio management is really important because it will help you earn more returns from the stock market compared to when doing some guessing, you know you don't want to mess around with your investment capital
My portfolio looks good but it's just not what anyone would want to have lol
I advice anyone who wants to have a perfect portfolio should first invest in the hands of a pro so they can share their knowledge with you then maybe later on you start investing independently so you don't end up making my mistakes
TIM YOON For me I think the problem here is looking an expert that can be trusted with my money. Do you recommend any?
Not all Investment expert really know what they are doing so it’s been hard for me finding one
Ferris Fitzgerald I can recommend Mr Rogan Colbert because I’ve been working with him for some time now with no complications. Connect with him at Roganfelixcolbert(ä)gmaïl•com
This is the best video explaining how to calculate the Variance of a portfolio! Thanks so much for making such good content.
There's so many steps to this it's not funny. thank you so much for the video. You help me figure out my homework problem.
Exceptionally Useful, THANK YOU SO MUCH
I swear to God you saved my grade. wish my teachers in school taught me like these. thank you for this vid
I don’t know if finance is for me Anymore 😂 might change to marketing
😭😭😂😂😂
Awwww😂😂😭
am doing marketing but still had to have a finance mod! this tutorial is a saviour
Finance is just plain boring, and that's coming from a professional trader of 12 years lol. I almost majored in finance but opted for business analytics and operations management instead.
I promise it’s not hard. Just plugging in numbers and adding and subtracting.
this is the most helpful video on this subject ever. i have a test in a couple hours and this helped me out so much
such a good video. my investments professor doesn't even explain anything. so this is soooooooooooo helpful
Hi FinanceKid, i got an expected return of portfolio as 2.725% Variance of 0.02800 and SD of 0.16733. Please share your answer so that we can check if we understood the concept. looking forward to your valued response. Thanks for your informed video
xoxo
How do you get the Standard Deviation ?
is this the same as σ^
2p = (wAσA)^2 + (wB σB )^2 + 2wAwB Cov(rA,rB ). It seems like it's leaving out the covariance part but the formula is confusing.
Thank you very much Sir, following you from Madrid, Spain. I will no longer skip my financial management lectures :)
may I know where 1/3 came from in Example #2?
EDIT: I'm assuming because there's 3 stocks, we use 1/3 and if there's 4 stocks, we use 1/4? Idk
Thank you for explaining it clearly. But there's only one question that at 8:08 if the way you showed us is wrong, what's the right way to calculate it. Maybe the following example cannot explain this.
Expected Return 2.725% and Variance 0.028001
Very good review for my FIN301 exam, thankyou!
I got 2,725 for a) and 2,8 for b) in bonus question
you got both answers right
you are a life saver!!
you saving degrees..@WITS
Wonderfull explanation greetings from India 🇮🇳
yo this finance course is hard af. i was in class writing notes and i remember thinking, "this is like writing in chinese. idk whats going on"
Jairus Roque this is middle school lvl stuff. If you find this hard you might have a problem.
Your grammar speaks for itself..
@@FF-ie6sd this is a college level course what? Buddy u got a problem
@@antonioromero878 I'm not writing an essay pal, especially for weirdo grammar nazi's on youtube lol
@@jairusroque3862 Yeah like calculus is hard lmfao even middle school students can do calc1,2,3. They are just algebra.
This is so wonderfully explained!
Greetings to you.
I found this video really useful.
I tried the last question at the end of the video. If you have the answers please let me know.
I want to compare with my answers. I really need to master this.
Looking forward to your response.
Expected return = 2.75% AND Variance = 2.8%
It seems like we all got a different answer for the bonus question
Hey man... Could really do these table in my exam( time limits) please make another video for future students to be able to do it from basic maths principals.... Thank you though 🏂
thank you Sir, i never understood the topic with my lecturer. God bess you
why in example 2 you find averge return for each stock then multiple it by weight of each return
while in example 4 you multiple the weight by return then the result multiplied by the probability of each state which is opposite of example 1
He was merging the expected returns for each stock in each of the assets, which are Boom, and bust. He was simplifying their portfolio.
Nevertheless, my question is, why did he use 1/3 as the weight portfolio for example two?
Excellent presentation. One question, how the return of the stocks is determined under each state of economy? Ex, using historical data or other assumptions. Thank you for teaching
Is there anywhere we could find those numbers directly or each management firm has to calculate by themselves?
Really well explained! Many thanks 🙏
How do i calculate the covariance and correlation
Thanks for the great video, its very helpful. Anyway, in calculating portfolio variance if the correlation was minus, shall we remove the minus? Thanks b4, found it in an example of valuation books and it kinda confusing
there aint nth simple bout this but thanks for making it bearable
Thank you!
Expected return of the portfolio 2, 73%, variance is 2,80% right?
I got a different variance of 7.306
I got E[R]P as 2.725% and the portfolios variance as 2.80%
Excellent video. Thank you,
Damodaran calculates the variance of a portfolio with the deviation of the actual returns from the expected return. What is the difference with this version? Thanks.
where is the 1/3 coming from at "4.13 minutes in the video" when calculating the portfolio expected return of stock A stock B stock C ??
So helpful thank you!
How can I get the probability of state of economy for the real stock variance analysis ?
This is AMAZING!
Frank, good job. But in determining the expected return of the portfolio, we mutliply by probabilities, and same even when getting the variance? I feel we have over used the probabilities 😃
Helpful thanks for your support
Thank you!!!
For the tables I’ve seen some tables which doesn’t include the probability of the economy , please how do we find for the probability
Can someone confirm the answer of bonus question
I got
A) 2.675 Expected returns
B) 0.177% variance
Suppose a company has a beta of 1.5, and the market return is 10% on 1-year treasury bills which
offers 6% hat is the expected return evaluate the answer... please help to find the answer
portfolio variance looks exactly the same as finding the co variance, im missing what the difference is?
very helpful thank you
Sorry, I am confused about how to calculate the product of the portfolio variance. May you explain in details? Thanks
Thank you
How to calculate this Question ?1. Mrs. Suzan thinks about investing her money in the stock market. She has the following two stocks in her mind: Stock “A”, and stock “B”. She knows that the economy can either go in recession or it will boom. Being an optimistic investor, she believed the likelihood of observing an economic boom is 65%. In addition she believed that stock A might perform less, thus she decided to allocate 35 % of her investment resources on this stock. You also know the following about your two stocks:
State of economy Probability RA RB Boom 25% 4% Recession 4% 15%
A. Calculate the expected returns for stock A and stock B B. Calculate the portfolio return C. Calculate the risk (standard deviation) for stock A and for stock B D. Calculate the covariance between stock A and stock B. E. Calculate the correlation between stock A and stock B. F. Calculate the variance of the portfolio G. Calculate the standard deviation of the portfolio H. Interpret the results of coefficients of correlation and justify weather there is diversification or not.
Wow this helps a lot
Is the expected return of an asset its CAGR or alpha?
this is good tanks sir
In example 3 what are 70% and _20% are they expected returns?
What if only boom has a probability but bust don't have? Can you help me?
Dear friends, the XYZ company have multiple child companies, I can see each child company is "product" in the product portfolio. How can I define return or risk of each company?. Thanks.
Expected return of the portfolio = 2.72%
Variance of the portfolio= 1.8%
The Expected return of portfolio is 6.5% and the Variance is .38%
For the bonus question I got a variance of 1.518%.
@financekid would you mind share the anwsers to the bouns question.
is the ER 3.1? and the VAR 306.79?
I got 2.03 for the expected return and 295.55 for the variance seems I’m wrong I followed the steps
is it always 1/3?
thank youu
good example
Where can i get the answer to the bonus question
How do we practically determine the probability of state of economy?
Bro help me
Thankkkk uuu
What is the answer for example 4
Bonus question Expected return = 2.725% Variance = 2.68%
what does a negative weight in a portfolio mean?
Sorry this may be late, but a negative weight means you're shorting it
What is book name author name?
Why is the portfolio weight 1/3 for example 2
Because the 3 stocks in the portfolio are equally weighted. So each stock will have a weighting of 1/3
love your vid very much
good job
please add your website
2.725 % expected return , 4.68% variance
just need more chapters like theory of utility, EMH, state preference
Wish I had the time! I will eventually reach those topics
Thank you for explaining it in a visual, comprehensible way. Can you give us the correct answer, so we can check if we got everything right?
@@financekid3163 HI Finane Kid,
Would you please share the anwsers to the bonus question. Would be appreciated.
I got 0.1845 as variance
Thank you so much! The CFA level 1 reading explains this horribly.
Found a variance of 7.16386%
How 1/3 is calculated
Stocks are equally weighted.
I got 1.664%
I got Expected return of portfolio 5.5% and variance is 3.43375% plz tell us the answers :(
Why is it one over three
Because the stocks are equally weighted, the investor invests one third in stock a, one third in stock b, and one third in stock c
@@angelisjessica948 wat in the question made us know its 1/3?
i got 0.122% for the bonus question
is the Variance for the Bonus question 10.84%?
can you send your workings
I got 2.8%
I got 1.664% ,
Mr. Richard i also got 2.8001. Anybody else?
Oliver Jones well done :)
You seem to know a lot about the topic however your explanation is a bit messy and quite stressful to understand.
Its too fast 🤥🙄
very bad explanation
i am so happy i have Sir Reed Cooper handling my investment,thanks to him am making more profit under him i thank God there are people like this in the world
how do i connect with such a man he sounds so promising
what a coincidence i have been investing with him for more than 6 months now
@@aracoggin1154 reeddcooper (@ ) gmail . com
@@duffygriffin9252 i just sent him a message on his email
@@aracoggin1154 +44 7727717803
you didnt even answer how to do the bonus question smh
thank you