In a previous post I covered how to calculate standard deviation using the TI BA II Plus calculator; in a more recent post I covered how this calculation could be done on the HP 12C calculator. CIPM candidates should also keep in mind that those methods can be used to calculate tracking error. For example, […]
Read More CIPM, CIPM Expert, CIPM Principles, downside deviation, performance measurement, risk measurement, semi-deviation, standard deviation, statistics, tracking errorOccasionally, when teaching our classes, I get a question along the lines of, “Can you explain what the Sharpe Ratio is, in 100 words or less?” Here’s what I say (I’ll try to be concise, but it may be over 100 words… You could have chosen to invest without taking risk by investing in the […]
Read More CIPM, CIPM Expert, CIPM Principles, John D. Simpson, performance appraisal, performance measurement, risk measurement, risk-adjusted performance, Sharpe ratio, standard deviation, The Spaulding GroupIn a previous blog post, I covered how one can make use of the statistics worksheet on the TI BA II Plus calculator to calculate standard deviation. In today’s post, I will cover the keystrokes for doing this on the statistics calculator on the HP 12C calculator. CIPM candidates are required to be able to […]
Read More CFA, CIPM, CIPM Expert, CIPM Principles, GIPS, HP 12C, John D. Simpson, performance measurement, risk measurement, standard deviation, statistics, The Spaulding Group, tracking errorAn Expert Level CIPM candidate recently emailed me regarding a question on the sample exam found on the CFA Institute website in the CIPM Program area at this link. Specifically they asked a question regarding question #12, which asks about the shortfall risk of the portfolio compared to the shortfall risk of the benchmark. The […]
Read More CIPM, CIPM Expert, downside deviation, downside potential, downside risk, ex-post risk, John D. Simpson, return measurement, risk measurement, shortfall risk, The Spaulding GroupDifferential return is a risk-adjusted performance measure that many CIPM candidates have not see before, and as a result, I get a lot of questions asking what exactly is the differential return… what does it mean and how should it be interpreted. Thus, I have decided to focus on this measure in a series of […]
Read More beta, CIPM, CIPM Principles, differential return, performance measurement, risk, risk adjusted performance measure, risk adjusted return, risk measurement, Sharpe ratio, standard deviation, subtraction alpha, Treynor ratio