Roy’s criterion – Excel Template

Roy's Criterion

If portfolio returns are normally distributed, Roy’s safety-first criterion translates into maximizing the safety-first ratio.

When we have a second portfolio, we would need to calculate its Safety-first ratio, then compare the results of the two portfolios given, and choose the one that has a more favorable ratio.

You should be able to tell which portfolio is preferable according to Roy’s safety-first criterion.

Other related topics you might be interested to explore are the Safety-first ratio and the Sharpe ratio.

This is an open-access Excel template in XLSX format that will be useful for anyone who wants to work as an Asset Manager or an Investment Professional.

You can now download the Excel template for free.

Roy’s criterion is among the topics included in the Quantitative Methods module of the CFA Level 1 Curriculum.

3-Statement Model – Excel Template

The P&L, Balance sheet, and Cash flow statements are three interrelated parts. The P&L feeds net income on the

3-Statement Model – Excel Template

The P&L, Balance sheet, and Cash flow statements are three interrelated parts. The P&L feeds net income on the liabilities and equity side of the Balance sheet. At the same time, we obtain Cash (an asset) by summing the bottom-line result of the Cash flow statement with previous year...
Learn More

Cash Flow – Excel Template

The cash flow statement shows how a company generated and spent cash throughout a given timeframe. An important truth

Cash Flow – Excel Template

The cash flow statement shows how a company generated and spent cash throughout a given timeframe. An important truth that is frequently neglected by inexperienced business owners is that profit does not equal cash. Every business owner and manager needs to have a clear idea of the cash flows...
Learn More

Balance Sheet – Excel Template

If the P&L statement shows how profitable a company was over a given timeframe, we can say that the

Balance Sheet – Excel Template

If the P&L statement shows how profitable a company was over a given timeframe, we can say that the Balance sheet is like a momentary picture of the firm’s condition at the time of preparation. The Balance sheet shows what a company owns (assets) and what it owes (liabilities...
Learn More