By far the best video on calculating the expected returns and variances! Thank you for posting this
@suzannedoyle53924 жыл бұрын
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. :)
@Zamo143906 жыл бұрын
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
@markgenuelparadero85905 жыл бұрын
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.
@angelakevin5042 жыл бұрын
😂😂😂
@rosymoon993 жыл бұрын
This is the best video explaining how to calculate the Variance of a portfolio! Thanks so much for making such good content.
@jeniececollazo70335 жыл бұрын
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.
@dianecai20354 жыл бұрын
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
@hasanmahmud84492 жыл бұрын
I swear to God you saved my grade. wish my teachers in school taught me like these. thank you for this vid
@키아나-c6v2 жыл бұрын
such a good video. my investments professor doesn't even explain anything. so this is soooooooooooo helpful
@alexu54012 жыл бұрын
Thank you very much Sir, following you from Madrid, Spain. I will no longer skip my financial management lectures :)
@haretztj46822 жыл бұрын
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
@olivejess89575 жыл бұрын
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
@natalyak.1345 жыл бұрын
My portfolio looks good but it's just not what anyone would want to have lol
@timyoon7335 жыл бұрын
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
@ferrisfitzgerald77695 жыл бұрын
TIM YOON For me I think the problem here is looking an expert that can be trusted with my money. Do you recommend any?
@stevejones1615 жыл бұрын
Not all Investment expert really know what they are doing so it’s been hard for me finding one
@timyoon7335 жыл бұрын
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
@lianliu54452 жыл бұрын
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.
@LorraineSamu5 жыл бұрын
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
@DanielRicardo138 ай бұрын
How do you get the Standard Deviation ?
@kingmoe15455 жыл бұрын
I don’t know if finance is for me Anymore 😂 might change to marketing
@cerise53174 жыл бұрын
😭😭😂😂😂
@franksomuahagyarko30743 жыл бұрын
Awwww😂😂😭
@adelpea3 жыл бұрын
am doing marketing but still had to have a finance mod! this tutorial is a saviour
@alexyoung24713 жыл бұрын
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.
@PorshaLaVieBelle2 жыл бұрын
I promise it’s not hard. Just plugging in numbers and adding and subtracting.
@sarahserwar59099 ай бұрын
Exceptionally Useful, THANK YOU SO MUCH
@jairusroque38625 жыл бұрын
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"
@FF-ie6sd4 жыл бұрын
Jairus Roque this is middle school lvl stuff. If you find this hard you might have a problem.
@antonioromero8784 жыл бұрын
Your grammar speaks for itself..
@jairusroque38624 жыл бұрын
@@FF-ie6sd this is a college level course what? Buddy u got a problem
@jairusroque38624 жыл бұрын
@@antonioromero878 I'm not writing an essay pal, especially for weirdo grammar nazi's on youtube lol
@FF-ie6sd4 жыл бұрын
@@jairusroque3862 Yeah like calculus is hard lmfao even middle school students can do calc1,2,3. They are just algebra.
@poornimack17603 жыл бұрын
Wonderfull explanation greetings from India 🇮🇳
@MossA-ox7ys3 жыл бұрын
Very good review for my FIN301 exam, thankyou!
@zachghilino83922 жыл бұрын
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.
@thakgalangmphahlele55825 жыл бұрын
you are a life saver!! you saving degrees..@WITS
@sahredwardbongah31403 жыл бұрын
thank you Sir, i never understood the topic with my lecturer. God bess you
@sokha55 Жыл бұрын
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
@CanadaDiarieswithEJP4 ай бұрын
crystal clear.. Thank you very much
@inamarykaleb21006 жыл бұрын
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.
@milihulugalle97744 жыл бұрын
Expected return = 2.75% AND Variance = 2.8%
@nihalkenawy65475 жыл бұрын
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
@stewardnyasulu95894 жыл бұрын
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?
@raminalibeyli92435 жыл бұрын
I got 2,725 for a) and 2,8 for b) in bonus question
@TheGeminancer4 жыл бұрын
you got both answers right
@fiosa10004 жыл бұрын
Expected Return 2.725% and Variance 0.028001
@contentcreator51612 жыл бұрын
This is so wonderfully explained!
@williama.rivera9414 Жыл бұрын
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
@nfl...32684 күн бұрын
how do you found the 10.368 and 2.592?? 6:54
@tauroshedgefunds4732 ай бұрын
at 6.40, he multiplied the state of probability again with squared number. Why did he do that? The actual variance calculation at this point is taking the whole summation average. And Std Deviation is sqrt(variance)
@lonnette246 жыл бұрын
It seems like we all got a different answer for the bonus question
@adelnemes73064 жыл бұрын
Excellent video. Thank you,
@richardgordon4 жыл бұрын
Really well explained! Many thanks 🙏
@ezravalentine40452 жыл бұрын
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 🏂
@wenkaiyang14872 жыл бұрын
Is there anywhere we could find those numbers directly or each management firm has to calculate by themselves?
@sushanthvm9267Ай бұрын
very nice video
@JonesDawg5 жыл бұрын
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.
@ilybarbiegirl3 жыл бұрын
So helpful thank you!
@xcsx66024 жыл бұрын
This is AMAZING!
@uniteyourself41543 жыл бұрын
Helpful thanks for your support
@wanjadouglas30584 жыл бұрын
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 😃
@Johnykeys4 жыл бұрын
How do i calculate the covariance and correlation
@biratutolosa31364 жыл бұрын
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.
@traffy407 Жыл бұрын
How do we practically determine the probability of state of economy?
@shinebayr408 Жыл бұрын
Bro help me
@Ibel334 жыл бұрын
How can I get the probability of state of economy for the real stock variance analysis ?
@isabelobeng53739 ай бұрын
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 ??
@TheRealChristianPress9 ай бұрын
Thank you!
@titanbenz96863 жыл бұрын
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
@palmer35842 ай бұрын
is there one on covariance
@sarmadrizvi5 жыл бұрын
Expected return of the portfolio = 2.72% Variance of the portfolio= 1.8%
@jananiravinag4 жыл бұрын
The Expected return of portfolio is 6.5% and the Variance is .38%
@piyushseth29054 жыл бұрын
Can someone confirm the answer of bonus question I got A) 2.675 Expected returns B) 0.177% variance
@davidubay8225 Жыл бұрын
Thank you!!!
@rickjames55604 жыл бұрын
@financekid would you mind share the anwsers to the bouns question.
@noahfogel96924 жыл бұрын
very helpful thank you
@VedeninaMS6 жыл бұрын
Expected return of the portfolio 2, 73%, variance is 2,80% right?
@matinajazmine5 жыл бұрын
I got a different variance of 7.306
@samsonkarisa1285 жыл бұрын
I got E[R]P as 2.725% and the portfolios variance as 2.80%
@StockSpotlightPodcast2 жыл бұрын
Is the expected return of an asset its CAGR or alpha?
@tahitymehranabdullah680810 ай бұрын
there aint nth simple bout this but thanks for making it bearable
@arbinlatief12624 жыл бұрын
In example 3 what are 70% and _20% are they expected returns?
@cncarrie25605 жыл бұрын
Sorry, I am confused about how to calculate the product of the portfolio variance. May you explain in details? Thanks
@jellenemae88234 жыл бұрын
Wow this helps a lot
@yashmirasanthika98013 жыл бұрын
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
@nousayba13434 жыл бұрын
is the ER 3.1? and the VAR 306.79?
@willbaldwin41782 жыл бұрын
For the bonus question I got a variance of 1.518%.
@scooby78772 жыл бұрын
portfolio variance looks exactly the same as finding the co variance, im missing what the difference is?
@benjaminberuh69252 жыл бұрын
Thank you
@romanbiyadglegni76854 жыл бұрын
this is good tanks sir
@palvirkaur293 жыл бұрын
what does a negative weight in a portfolio mean?
@cjohnson9211 Жыл бұрын
Sorry this may be late, but a negative weight means you're shorting it
@jelordferrer24954 жыл бұрын
What if only boom has a probability but bust don't have? Can you help me?
@ntcuong01ct14 жыл бұрын
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.
@ahmedalsharrah12252 жыл бұрын
is it always 1/3?
@stewardnyasulu95894 жыл бұрын
Why is the portfolio weight 1/3 for example 2
@nenyejudith3 жыл бұрын
Because the 3 stocks in the portfolio are equally weighted. So each stock will have a weighting of 1/3
I got 2.03 for the expected return and 295.55 for the variance seems I’m wrong I followed the steps
@hangbuithiminh39876 жыл бұрын
love your vid very much
@Anessa_wo4 жыл бұрын
thank youu
@apoorvatiwary33594 жыл бұрын
What is the answer for example 4
@mphosylviaramalamula26677 жыл бұрын
good example
@dikshamunogee55766 жыл бұрын
just need more chapters like theory of utility, EMH, state preference
@financekid31636 жыл бұрын
Wish I had the time! I will eventually reach those topics
@HawkPlatinum6 жыл бұрын
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?
@rickjames55604 жыл бұрын
@@financekid3163 HI Finane Kid, Would you please share the anwsers to the bonus question. Would be appreciated.
@scottforesgaming5 жыл бұрын
Thankkkk uuu
@navneetkaur83285 жыл бұрын
How 1/3 is calculated
@sarmadrizvi5 жыл бұрын
Stocks are equally weighted.
@luwi_live4 жыл бұрын
2.725 % expected return , 4.68% variance
@jafferleibiofficial85874 жыл бұрын
What is book name author name?
@maithrilive Жыл бұрын
good job
@mphosylviaramalamula26677 жыл бұрын
please add your website
@bigshot95586 жыл бұрын
Why is it one over three
@angelisjessica9486 жыл бұрын
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
@XAUGEEK Жыл бұрын
@@angelisjessica948 wat in the question made us know its 1/3?
@pittedmetal3 жыл бұрын
Thank you so much! The CFA level 1 reading explains this horribly.
@JM-wn6gu6 жыл бұрын
I got 0.1845 as variance
@preakyzvidzai98296 жыл бұрын
i got 0.122% for the bonus question
@kaluwemulube14535 жыл бұрын
Found a variance of 7.16386%
@carlosalbertonievesperez72766 жыл бұрын
is the Variance for the Bonus question 10.84%?
@preakyzvidzai98296 жыл бұрын
can you send your workings
@mr.richard31096 жыл бұрын
I got 2.8%
@nelgimjacobs40046 жыл бұрын
I got 1.664% ,
@O1986J6 жыл бұрын
Mr. Richard i also got 2.8001. Anybody else?
@mr.richard31096 жыл бұрын
Oliver Jones well done :)
@nelgimjacobs40046 жыл бұрын
I got 1.664%
@felipeg74155 жыл бұрын
You seem to know a lot about the topic however your explanation is a bit messy and quite stressful to understand.
@StarCTK516 жыл бұрын
I got Expected return of portfolio 5.5% and variance is 3.43375% plz tell us the answers :(
@mishujhamat73414 жыл бұрын
Its too fast 🤥🙄
@MoonLight-fs6gl5 жыл бұрын
very bad explanation
@porterparech94595 жыл бұрын
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
@aracoggin11545 жыл бұрын
how do i connect with such a man he sounds so promising
@duffygriffin92525 жыл бұрын
what a coincidence i have been investing with him for more than 6 months now
@duffygriffin92525 жыл бұрын
@@aracoggin1154 reeddcooper (@ ) gmail . com
@paulinemccrre29115 жыл бұрын
@@duffygriffin9252 i just sent him a message on his email
@duffygriffin92525 жыл бұрын
@@aracoggin1154 +44 7727717803
@Alexander123321ify4 жыл бұрын
you didnt even answer how to do the bonus question smh