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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

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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, 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 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? 10.40% 7.80% 15.60% 14,04% Suppose each stock in Andre's portfollo has a correlation coefficent of 0.4(p=0.4) with each of the other stocks. If the weighted average of the risk of the individuol secumties (os measured by their standard devations) induded in the partially diversified four-atock portfolio is 43%, the portfolions

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