Calculate Risk And Return Of A Two-Asset Portfolio In Excel (Expected Return And Standard Deviation)

We calculate the expected return and risk (standard deviation) of a two-asset portfolio when we invest different weights in stocks A and B in order to identify what the efficient portfolio would be. To calculate the return we multiply the weighted average of the returns of stocks A and B. The risk is measured by calculating the standard deviation of the portfolio which is the square root of the variance. Once the risk and return are calculated we interpret which portfolios are sub-optimal based on the risk and return figures.

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Overview: (0:00)
Calculate Expected Return: (1:32)
Calculate Risk: (2:37)
Interpret Portfolios: (3:50)