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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
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 Percentage of Portfolio 20% 30% 35% 15% Expected Return 6.00% 14.00% 13.00% 3.00% Standard Deviation 36.00% 40.00% 43.00% 45.00% Stock Artemis Inc. Babish & Co Cornell Industries Danforth Motors What is the expected return on Andre's stock portfolio? 14.04% 15.60% 7.80%o 10.40% 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 risk of the individual securities (as measured by their standard deviations) included in the partially diversified four-stock portfolio is 41%, the portfolio's standard deviation (Op) most likely is 41%
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