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WorksheetsLecture 6 - Portfolio Modelling in Excel
Total questions: 20
Worksheet time: 15mins
With………………, there is no linear relationship between the returns on the two securities.
Correlation Coefficient.
Positive correlation.
zero correlation.
Negative correlation.
Perfectly ________ correlated series move exactly together and have a correlation coefficient of ________, while perfectly ________ correlated series move exactly in opposite directions and have a correlation coefficient of ________.
negatively; -1; positively; +1
negatively; +1; positively; -1
positively; -1; negatively; +1
positively; +1; negatively; -1
E(ri) denotes:
the expected return on asset i
the expected return on asset r
the expected return on asset E
None of these
Cov(ri, rj) denotes:
the covariance of asset i’s and asset j’s variances
the covariance of asset i’s and asset j’s standard deviations
the covariance of asset i’s and asset j’s returns
None of these
what is the difference between Cov(ri, rj) and σij ?
second is wrongly written
both are same.
both are same but different in calculation
first is covariance and second is called variance
What is the difference between sample and population ?
The size of the sample is always less than the total size of the population
The size of the population is always less than the total size of the sample
both are the same.
When calculating any statistic for sample, always use N-1
Is there a significant difference between the sample standard deviation and population standard deviation?
Yes, always.
Mostly no.
Not sure.
What kind of question is that! how should I know???
If you wish to calculate returns using Continuously Compounded Return, what Excel formula you should use?
Simple division and subtraction, =/-
Natural Logarithm, =ln
Multiply Matrix, =mmult
None of these
If you wish to calculate the variance and standard deviation, should you use sample or population of the corresponding formulas in Excel?
Population, because we are dealing with whole population
Population, because both will result exactly the same
Sample, because both will result exactly the same
Sample, because we are generally having a sample of the population
Which one of the following formulas is best to interpret about the relationship between two assets?
= COVARIANCE.S
= CORREL
= COVAR
= CORRELATION
The covariance value is always between what numbers?
-1 and +1
0 and +1
-1 and 0
None of these
How do you plot variable in a chart using Excel?
Using line chart
Using scatter chart
Using pie chart
Using combo chart
How do you calculate the variance of portfolio using Excel? Select more than one.
using the average of the two variances (=AVER) of the stocks.
Using =VAR.S for the returns of portfolio
Manually input the values using the formula for portfolio variance.
A combination of =VAR.S and manual imputation of parameters in portfolio variance formula
What is the easy way in Excel to calculate and plot Mean and SD of portfolio of two assets?
Using Data Table, and then line chart
Using Data Table, and then scatter plot
Using =MMULT and then scatter plot
Using =MMULT and then line chart
A portfolio of risky assets given in a matrix X must follow a rule. What is that rule?
The sum of all Xs should be zero.
No X should have a zero value.
No X should have a negative value.
The sum of all Xs should be one.
What are the diagonal values in a variance-covariance matrix?
The standard deviation of each individual asset
The standard deviation of each individual asset with another asset
The variance of each individual asset
The variance of each individual asset with another asset
why do you need to transpose the vector for weights when calculating the portfolio variance in Excel? Do you always need to transpose?
to ensure it follow the matrix transpose rule. We don't need to transpose always, it depends.
to ensure it follow the matrix multiplication rule. We need to transpose always.
to ensure it follow the matrix multiplication rule. We don't need to transpose always, it depends.
to ensure it follow the matrix transpose rule. We need to transpose always.
.................. is the portfolio that gives the highest expected return of all portfolios having the same variance
envelope frontier
envelope portfolio
efficient portfolio
efficient frontier
Did you learn something new today?
Yes. I learned so many new things today.
Yes. I learned only a few things today.
No. I already knew all these from the previous courses.
What happened? I just woke up! Can you repeat what did you teach today?
We completed Lecture 6, almost one-third of the semester is completed. Tell me anything you have in mind. Any question, comment, feedback about the course, lecture, assignment, tests, exam, level of difficulty, etc.
