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: TTY Stock Percentage of Portfolio Expected Return Standard Deviation Artemis Inc. 20% 6.00% 30.00% Babish & Co. 30% 14.00% 34.00% Cornell Industries 35% 13.00% 37.00% Danforth Motors 15% 5.00% 39.00% What is the expected return on Andre's stock portfolio? O 16.05% O 8.03% O 14.45% O 10.70% Suppose each stock in Andre's portfolio has a correlation coefficient of 0.4 (p = 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 35%, the portfolio's standard deviation (ơp) most likely is v 35%.

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A: Portfolio Standard Deviation is the standard deviation of the rate of return on an investment…

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A: Given Information:

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Q: Suppose Latasha owns a two-stock portfolio that invests in Happy Dog Soap Company (HDS) and Black…

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Q: ou own a portfolio consisting of 35% Treasury bills and 65% stock Q. The return for Treasury bills…

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A: Beta of portfolio is weighted average beta of all stocks in portfolio.

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Q: What is the portfolio’s expected return?

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Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary. 

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.