- CFA Exams
- CFA Level I Exam
- Study Session 2. Quantitative Methods (1)
- Reading 7. Statistical Concepts and Market Returns
- Subject 6. Measures of Dispersion
CFA Practice Question
There are 410 practice questions for this study session.
CFA Practice Question
A portfolio earned the following rates of return over a period of twelve months.
What is the portfolio's co-efficient of variation?
Explanation: Co-efficient of variation = Std. dev./Average return = 0.85/0.24 = 3.54
User Contributed Comments 15
|danlan||Ignore risk free rate.|
|anricus||How is the standard deviation calculated? I've used my calculator and Sx is .85 but this is a population so variance x is applicable which I got as .81??|
|danlan||Sample standard deviation is 0.852445 and population standard deviation is 0.81615|
|MUSK||Why are we using sample standard deviation here rather than using population standard deviation?|
|gaur||Is there a quick way to calculate Std. dev. I got the answer by doing Sum of all(Observation - Average)sq divided by n-1 (11). I got the right answer but it took like 5 mins to do it...Iam not sure 5 mins is appropriate time to spend on a question even if you can get it right. Iam more inclined towards leaving this and moving on...and maybe revisiting the question if I have time left in the end|
|achu||Using the BA 2-Plus ,you can enter the data mode and enter 12 x-values. The calculator will then compute the mean and sample variance.|
|teeday||thanks for the heads up on using the BA 2!|
|Yannicklin||sample: because it's only for a period of 12 months
we would have taken population if we had portfolio returns for all periods held
|kellyyang||can someone shows how to get the #.81 and .24.
|NickPash||Can anybody show me how you can do this in HP12C? I spent more than 5 mins for this doing it mannually. Tnx.|
|NickPash||Enter all xs such as 1.25 enter sigma+ ...-1.05 enter sigma+, then press, gS = .8524 , gx-bar = .24 , .85/.24=3.54|
|endurance||Easy task really - on the BAII, type in all the returns in the data (2nd data). Change to "stat" (2nd stat) and find X-bar and stddev. Divide 0,85 with 0,24 and you'll get 3.5417|
|hmichta||Thanks endurance. Will save me loads of time :)|
|farhan92||guys using the ba II remember you can store values using the STO button and recall them using the RCL button so when you get to the mean hit STO 1 and then for the SD hit STO 2. Then do RCL 2/RCL 1|