Calculate the expected Financial Consequence E(FC) (mean value).

,

where P_i – Probability Assessment of Likelihood of State;

X_i – Financial Consequences of Being in This State;

N – sample size.

& Use function SUMPRODUCT

5. Add columns "Absolute deviation" to the main tables for each project and calculate deviation of the Financial Consequences from its expected value

X_i – E(FC)

6. Calculate the variance D(FC):

& Use function SUMPRODUCT

7. Calculate the Standard Deviation σ(FC): (root of the variance).

8. Calculate the Coefficient of variation: CV(FC) = (σ(FC)/ m(FC)) · 100%

Create a table to calculate semi-characteristics for Financial Consequences.

Semi-characteristics (one-sided deviations)
	Project А	Project В
Sample Semi-Variance SDFC
Sample Semi-Standard Deviation SσFC
Semi-Coefficient of variation SCV FC

10. Calculate the Semi-Variance SD_FC:

& In the numerator use a function SUMPRODUCT and select only the cells with negative deviations.

& In the denominator use a function SUM and then only in cells, corresponding negative deviations.

11. Calculate the Semi-Standard Deviation: Sσ_FC

12. Calculate the Semi-Coefficient of Variation:

SCV_FC = (Sσ_FC / E(FC)) · 100%.

Build the charts showing the dependence of the standard deviation from the expected profit rate for two-sided and one-sided deviations. Analyze the results.

Make the conclusion, if the net return over month distribution is symmetric or not and what outcome (positive or negative) is more probable (in accordance with algorithm, which you have used in the part 1 of the laboratory work)..

In the base of the obtained results of quantitative risk analysis of stocks formulate the advice for decision maker, provides for possible automatically generate the answer for making a decision on the choice of type of stocks, that guarantee the best combination of the expected value of Financial Consequences and degree of risk (in accordance with algorithm, which you have used in the part 1 of the laboratory work)..

ADVICE FOR DECISION MAKER

Дата добавления: 2015-10-26