Adj Close Return SPY Variance Deviation -0.036360 2/1/2018 248.46266 -0.031291 3/1/2018 240.68814 0.009194 4/1/2018 242.90106 5/1/2018 248.80574 6/1/2018 249.118 7/1/2018 259.50705 8/1/2018 267.79038 9/1/2018 268.16858 Date 1/1/2018 257.83771 10/1/2018 250.76706 11/1/2018 255.41855 12/1/2018 231.57704 1/1/2019 251.57904 2/1/2019 259.73416 3/1/2019 263.27579 0.024309 0.001255 0.041703 0.031919 0.001412 -0.064890 0.018549 -0.093343 0.086373 0.032416 0.013636 0.045437

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A: The standard deviation shows the average volatility in the returns of the stocks.The higher the…

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A: The given stochastic process is defined by:Xt​=Xt−1​⋅exp(μ+σεt​)where μ and σ>0 are constants,…

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A: The variance of returns refers to the spread of the returns of a company or portfolio around the…

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A: Here, To Find: Standard deviation of IWM =? Standard deviation of EEM =?

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A: Variance is a measure of risk in finance terms. Variance measures degree of spread for a given data.

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A: μy=E(Y) = 3X1+2X2 = 3(10) + 2(5) = 30 +10 =40σy2=V(Y) = 32(4) + 22(9) = 36 + 36 = 72 b) Y ~ N…

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Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary. 

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.