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what is the expected return of Andres stock portfolio Portfolio...

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Accounting

what is the expected return of Andres stock portfolio
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Portfolio expected return and risk A collection of financial assets and securities is referred to as portfolio. Most individuals and institutions invest in a portfolio, making portfolio risk analysis an integral part of finance. Just like standalone assets and securities, portfolios are also exposed to risk. Portfolio risk refers to the possibility that an investment portfolio will not generate the expected rate of return. Analyzing portfolio risk and return involves the understanding of expected returns from a portfolio. Consider the following Andre is an amateur investor who holds a small portfolio consisting of only four stocks. The stock holdings in his portfolio are shown in the following tables: What is the expected return of Andre's stock portfolio? 7.80% 15.60% 14.04% 10.40% Suppose each stock is the preceding portfolio has a correction coefficient of 0.4 (rho = 0.4) with each of the other stocks. If the weighted average of the risk (standard deviation) of the individual securities in the partially diversified portfolio of four stocks is 33%, the portfolio's standard deviation (sigma_p) most likely is 33%

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