Andre is an amateur investor who holds a small portfolio consisting of only four stocks....
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Andre is an amateur investor who holds a small portfolio consisting of only four stocks. The stock holdings IH portfolio are shown in the following table: Standarod Deviation 28.00% 32.00% 35.00% 37.00% Percentage of Expected Portfolio 20% 30% 35% 15% Return 6.00% 14.00% 12.00% 3.00% Stock Artemis Inc. Babish & Co. Cornell Industries Danforth Motors What is the expected return on Andre's stock portfolio? 7.54% 13.57% 10.05% 15.08% Suppose each stock in Andre's portfolio has a correlation coefficient of 0.4 (p 0.4) with each of the other stocks. If the weighted average of the risk of the individual securities (as measured by their standard deviations) included in the partially diversified four-stock portfolio is 33%, the portfolio's standard deviation (%) most likely is 33%
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