Question

The options for the fill in question are equal to/greater than/less than

7. Portfolio expected return and risk A collection of financial assets and securities is referred to as a portfolio. Most individuals and institutions invest in a portfolio, making portfolio risk analysis an integral part of the field of finance. Just like stand-alone assets and securities, portfolios are also exposed to risk. Portfolio risk refers to the possibility that an investment portfolio will not generate the investor's expected rate of return. Analyzing portfolio risk and return involves the understanding of expected returns from a portfolio. Consider the following case: 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 table: Stock Percentage of Portfolio Expected Return Standard Deviation Artemis Inc. 20% 6.00% 29.00% Babish & Co. 14.00% 33.00% 30% 35% Cornell Industries 11.00% 36.00% Danforth Motors 15% 3.00% 38.00%

Answer 1

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ke - Microsoft Excel (Product Activation Failed) Add-Ins File Home Insert Page Layout Formulas Data Review View - 2x % Cut Calibri A = = = V General 11 B- A A Wrap Text Merge Merge & Center - Center B I U SF 4:0 .00 . Insert Delete Format $ -% % Number E Copy Paste Format Painter Clipboard F302 - Conditional Format Formatting as Table Styles Cell Styles Σ AutoSum : A Fill Sort & 2 Clear Filter Editing Find & Select Font Alignment Cells for 285 286 287 288 289 290 WEIGHTS RETURN WEIGHTED RETURN А A*B 291 ARTEMIS BABISH CORNELL DANFORTH 20% 30% 35% 15% 6% 14% 11% 3% 1.20% 4.20% 3.85% 0.45% 292 293 294 295 ANSWER: EXPECTED RETURN ON PORTFOLIO = 9.70% 296 297 ANSWER: IT WOULD BE LESS THAN 34% 298 299 AS NO OF STOCKS ARE ADDED WITH LOWER CORRELATION COEEFICIENT, 300 RISK WILL BE LOWER THEN AVERAGE STANDARD DEVIATION 301 302 303 M KE CAPM UTILITY, SHARPE, beta convexity DGM beta port future INDEX INTL CAP BUD SANDRINE LEASING Rea ferences: AG470 K PV, FV, ANNUITY DIR right clean O YIELD bond portfolio WACC BOI 130% 9 . * 0 ENG RI 20- 2. B 25-11-2019