sfm nov 17 que 6(a)

in a situation where weights are not given means they are equally weighted. half half. we have to assume weight as 0.50 and 0.50.

so answer is:

take total of returns devide it by 5 (total number of years) = you will get average return for 1 security. do it for 2nd security also. 

Return of portfolio = ( Weight 1 * average return of Security 1 ) + (weight 2 * average return of security 2)

weight = 0.50 for each. 

Risk:

Using (X - X!) approach, deduct each year return from average return then square it. 

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i did till this stage, i could not recall the formula to use without correlation. ?

i think this might be the way to solve that problem. dont know whether it is right or wrong. how you solved? anyone else?

yeah right. the most ambigious question.