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 portiolion 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: What is the expected return on Andre's stock portfolio? 9.70% 7.28%14.55%13.10% Suppose each stock in Andre's portfolio has a correlation coefficient of 0.4(=0.4) with each of the other stocks. If the weighted average of the ristertion the individual securities (as measured by their standard deviations) included in the partially diversified four-stock portfolio is 30%, the portfolio's standard deviation (p) most likely is 30%