2025-05-24

How to calculate ex-ante returns and risk

In this video, we'll tackle a classic finance problem: calculating expected returns and standard deviation for a stock given economic scenarios. Using probabilities and a capital gain formula, we’ll compute returns for boom, stable, and recession scenarios, determine the expected return, and calculate standard deviation step by step. Whether you're prepping for exams or just looking to sharpen your finance skills, this walkthrough breaks down every formula and concept to make mastering these calculations easy and efficient.

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