Beatnik

or those who have Schweser Notes - Turn to page 204. This is the example I am using here.
PROB
10% EPS 1.80
20% EPS 1.60
40% EPS 1.20
30% EPS 1.00
Now start inputting the data. To do this press 2nd (data)< --is number 7
Then 2nd Clear Work to be safe -clear out data
With me so far: Now were ready - -This is sooo easy!!
X01: 1.80 Press Enter
Y01: 10% (put it in % not decimal for all of them) Press Enter
X02: 1.60 Enter
Y02: 20% Enter...and so forth press enter for all of them
X03: 1.20
Y03: 40%
X04: 1.00
Y04: 30%
Now first step to do is change the stat to 1V ( I think its in "LIN" by default), which is 1 Variable ----> Button 2nd (stat) (stat is number 8) then 2nd (set) (which is the enter button)
Keep pressing 2nd set until you see 1-V...Once you see 1-V, start pressing the arrows (up and down) to get the results.
In this case, press arrow down. Pressing down twice will give you the (E)r, which on the calculator is XBAR : Nice $1.28 !!!
4th arrow down is the population std deviation (SIGMA x ) on the calculator : .27129 (Pg 205 Schweser)
Square that and you get your VARIANCE!!!



I’m not sure how to do the Prob Method for 2 Variables but I do know how to do it using the historical data method (Used in Portfolio Mgmt)

Same Concept but now you have to change the 1-V to LIN

Enter Data for Stock A as X and Stock B for Y

2nd Stat ---> LIN start pressing the arrows

It calculates the population and sample mean for , sample std deviation (Sx), Population Std Dev (Sigma x) for stock A&B and the correlation coefficient (which is “r”) on the calculator. For historical data, remember its n-1, so use the sample std deviations for A&B

Square the std deviations and you get the Variances and obviously if you have both Std Deviations and the Correlation Coefficient, Guess what? You can get easily get the Covariance...I’ll leave that for you to figure out!!

Now if someone can figure out a way to get this information for 2 Variables using Probabilities, PLEASE POST IT ASAP!! Thanks and good luck EVERYONE!!

amqata

Here is the golden trick.

For 15% , use 15 instead of 0.15 and so on. Divide the final answer by 100. With this you can solve the question under 90 sec.

Cheers

johnnyBuz

you can solve covariance on the calculator by inputting X and Y values.

and then solving for sigmax, sigma y, and roe (remember to take sample sigmas if they give you a sample)

cov = roe * (sigmax * sigmay)

jim8z3

@gartsy: i meant Portfolio Cov with joint probability table...I wish TA would include it on their calculator.... :|