3. Portfolio expected return and risk A collection of financial assets and securities is referred to as a portfolio. Most individuais and institutions invest in a portfollio, making portfolio risk analysis an integral part of the fleld of finance. Just like stand-alone assets and securities, portfollos are also exposed to risk. Portfollo 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 portfollo. Consider the following case: Andre is an amateur investor who holds a small portfolio consisting of only four stocks. The stock holdings in his portfollo are shown in the following table: What is the expected return on Andre's stock portfolio? 15.00% 13.50% 7.50% 10.00% Suppose each stock in Andre's portfolio has a correlation coethilent of 0.4(=0.4) with each of the other stocks. If the welghted average of the risk of the indlidual securities (as measured by their standard deviations) included in the partialy diversifed four-atock portfolio is 31%, the partfolio's standars deviation () most likelly is