The Investment proportion of the portfolio is to be determined when the required expected return is 14%. The standard deviation in this question is to be compared with the optimized portfolio of the previous problem. Introduction: The portfolio risk is defined as the combination of assets which carries its own risk with each investment. The standard deviation is used to determine that in which manner the values from a data set vary from its mean value. This is calculated by the square root of the variance. s t a n d a r d d e v i a t i o n = v a r i a n c e The expected return is defined as the return which is obtained on the risky asset that is expected in future.

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Chapter 7, Problem 10PS

Summary Introduction

To calculate: The Investment proportion of the portfolio is to be determined when the required expected return is 14%. The standard deviation in this question is to be compared with the optimized portfolio of the previous problem.

Introduction: The portfolio risk is defined as the combination of assets which carries its own risk with each investment.

The standard deviation is used to determine that in which manner the values from a data set vary from its mean value. This is calculated by the square root of the variance.

standard deviation=variance

The expected return is defined as the return which is obtained on the risky asset that is expected in future.

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