The expected return and standard deviation of a portfolio of risky assets is equal to the...
The expected return and standard deviation of a portfolio of risky assets is equal to the weighted average of the individual asset's expected returns and standard deviation.
Group of answer choices
True
False
Homework Answers
False.
The statement is partially incorrect.
Expected return of a portfolio of risky assets is equal to the weighted average of the individual asset's expected returns.
However, expected standard deviation of portfolio of risky assets is not equal to the weighted average of the individual asset's expected standard deviation. This is also influenced by the correlation between the constituents of portfolio.
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The expected return and standard deviation of a portfolio of
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