portfolio expected return and risk

A collection of finandal 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 finance. Just like standalone assets and securities, portfolios are also exposed to risk. Portfolio risk refers to the possibility that an investment portfolio will not generate the expected rate of retum. Analyzing portfolio risk and return involves the understanding of expected returns from a portfolio. Consider the following case: Kevin 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: Stock Artemis Inc Babish & Co Cornell Industries Danforth Motors Percentage of Portfolio 20% 30% 35% 15% Expected Return 6.00 14.00% 12.00 5.00% Standard Deviation 23.00% 27.00 30.000 32.00 The expected return on Kevin's stock portfolio is Suppose each stock in the preceding portfolio has a correlation coeficient of 0.4 (-0.4) with each of the other stocks. If the weighted average of the risk (standard deviation) of the individual securities in the partially diversified portfolio of four stocks is 28%, the portfolio's standard deviation d) most likely is 28%