Standard deviation and variance of expected returns (for the @CFA Level 1 exam)

[@olavobrasil1]

Your videos are really great and are helping me get through the CFA lvl1 books. How much % of the exam would you say that your videos cover?

[@letmeexplaincfa]

Thank you very much. I think the content covers something like 5 - 8% of the Level 1 content but I have big plans to expand this channel in 2024👍

[@adialowaifeer1593]

Thank you for the informative video. I've tried the (DATA) function in the calculator, entering returns as X values and probabilities as Y, then computing variance and standard deviation using the (STAT) function. Would I get away with this shortcut every time, or am I missing something?

[@letmeexplaincfa]

Brilliant, absolutely go with this shortcut and use it! It should be ok, as long as you enter the relevant inputs the right number of times :)

[@meruertzhussupkaliyeva2230]

How did you get that E(RA) is 0.49% and E(RB) is 2.37%?

[@letmeexplaincfa]

They come from the previous video in the Quantitative Methods playlist. Here's the link: kzbin.info/www/bejne/nH2rqHevlNWIg5osi=6PGLMhLpkH5LFyBr

[@owenselby3108]

very helpful thanks

[@letmeexplaincfa]

Nice 👍 Thank you

[@typicalgamer5560]

Is there a faster way to solve this with a ba 2 plus calculator?

[@typicalgamer5560]

Also, for the variance doesnt the formula include n-1 in the denominator?

[@letmeexplaincfa]

Yes, but you would need to input each of the variable combinations as observations the right number of times, corresponding to their probability of occurence, e.g. 40% would require you to make the input 4 times out of 10.

[@letmeexplaincfa]

Because you are not dealing with observations here but probabilities, there is no n or n-1

[@typicalgamer5560]

@@letmeexplaincfa Firstly, thank you very much for the reply, but when I do it this way my answer is b for some reason, yet I am doing it exactly as you said, and my mean or in this case Ex R is the same as yours

[@letmeexplaincfa]

@@typicalgamer5560 ok, but the answer to the question is indeed B :)