4. Computing the Basic Statistics A security analyst has prepared the following probability distribution of the possible returns on the common stock shares of two companies: Compu-Graphics Inc. (CGI) and Data Switch Corp. (DSC).
5. The Mean For CGI, the mean (or expected) return is: Similarly, the mean return for DSC is 24.00%
6. The Variance and Standard Deviation The variance of CGI’s returns is: The Standard Deviation of CGI’s return is:
11. Portfolio Expected Return and Risk Expected Return Risk The Expected Returns of the Securities The Portfolio Weights The Risk of the Securities The Portfolio Weights The Correlation Coefficients
16. Consider stocks of two companies, X and Y. The table below gives their expected returns and standard deviations . Plot the risk and expected return of portfolios of these two stocks for the following (assumed) correlation coefficients: -1.0 0.5 0.0 +0.5 +1.0 Correlation Coefficient and Portfolio Risk