7. Portfolio expected return and risk A collection of financial assets and securities is ceferred to as a portfolio. Most individuals and institutions invest in a portiolioj making portfolio risk. analysis an integral part of the field of finance. Just ilke stand-alone assets and securities, portfolios are olso exposedi to risk. Portfolio risk refers to the possibility that an investment portfollo will not generate the Investor's expected rate of raturn. Analyzing portfolio risk and raturn 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? 14.55% 9,70 7.20%m 13.10He Suppose each stock In Andre's portlollo has a correlation coefficient of 0.4(=0.4) with each of the other stocks. If the weighted average of the riak of the individual securities (as measured by thelr standard deviations) included in the partially diversified four-stock portfolio is 30 as, the portfolio's standard deviation (p) most likely is