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Which of the following statements is true about the expected return and risk of a portfolio of investments? There could be more than one correct
Which of the following statements is true about the expected return and risk of a portfolio of investments? There could be more than one correct answer. Generally speaking, the riskier the investment the higher the expected return has to be to attract investors. The expected return and standard deviation of the portfolio are simply the averages of the individual investment returns and standard deviations. If there is a potential investment or portfolio of investments that has a low expected return you can be sure that it is not risky The expected return of the portfolio is the average of the individual investment returns but the standard deviation of the portfolio is more complicated and also depends on how the individual asset returns are correlated
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