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Computing expected risk on a portfolio

Computing expected risk on a portfolio - Microsoft Excel Tutorial

From the course: Excel for Investment Professionals

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Computing expected risk on a portfolio

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- [Narrator] One key factor that all investors care about, is the expected returns on their portfolio, especially under conditions like economic recessions or economic expansions. How much can I expect to earn, on average, over time? Excel's helpful for answering this question when we're considering the uncertainties that investors face daily. I'm in the zero five zero three begin Excel file. Now what we have here are three different Chinese stocks, Alibaba, Tencent, and JD.com, along with two bonds. We've also got their expected returns based on various economic scenarios. How much will I expect to earn on this portfolio overall? Well, in order to determine that, I simply need to take the weight that I have, or the allocation that I have to each holding and multiply it by the expected return on each of those different securities. This process is a good way to get a handle on what we might expect to happen to our portfolio under various economic conditions. So all we're going to do is…

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