Quantitative Methods







Quantitative Methods
Group Coursework Assignment



Executive summary:
To: Every colleague in Alpha investments Inc. From: Data analytics team, Aditi Sanghvi, Giovanna Palumbo, Renata Vieira Date: 29th November 2013 Subject: Importance of Quantitative Methods in investment's risk analysis

This report outlines the influence of Quantitative Methods in Business

decision-makings, by showing graphics, charts, formulas and theories in order to make more assertive decision in a company. It was demonstrated on this document the correct use of expected values, standard deviation and coefficient of variation while analazying the prospect of investments. According to the calculations it is plausible to say that even though stock Y appears to have a lower risk (standard deviation is lower), the correlation between risk and reward of stock X is more profitable. The risk is slightly higher than stock Y but the average reward is higher as well, as it will be comproved in section 1.0 Expected values and 3.0 Coefficient of variation. In a conclusion it is always advisable to be aware of the investors risk tolerance when he/she is choosing investments for their portifolio. The risks will always endure if the achievement is to reach returns; as a consequence, if the investor wants to make profit, it is nearly impossible to cut all risks. In simple words the goal must be able to find the appropriate balance between risk and reward. Which in the end will make profit without "putting all in". profit and loss when searching for potential



Table of Contents