Portfolio:
A portfolio is the total collection of the investments held by an investor, which includes bonds, stocks, options, futures, and other investments like gold or limited partnerships. Most portfolios are diversified to protect against the risk of single securities. So, portfolio analysis involves analyzing the portfolio as a whole.
The return of a portfolio is the weighted average of the
The Expected Return of a Portfolio refers to the weighted average of the expected returns on each individual investment in a particular portfolio. The Expected Return of a Portfolio can be calculated using the formula given below.
Where,
- is the expected return of portfolio
- is the weight of the investment or stock
- is the expected return of investment or stock
To ascertain: The expected return of the portfolio.
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Fundamentals of Corporate Finance, Student Value Edition (3rd Edition) - Standalone book
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