FUND.OF CORP.FINANCE PKG. F/BU >C<
FUND.OF CORP.FINANCE PKG. F/BU >C<
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ISBN: 9781323165997
Author: Berk
Publisher: PEARSON C
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Chapter 12, Problem 2P
Summary Introduction

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 return of its component assets. Portfolio risks can be calculated by considering the standard deviation of the variance of actual returns of the portfolio over time.

The Expected Return of a Portfolio FUND.OF CORP.FINANCE PKG. F/BU >C<, Chapter 12, Problem 2P , additional homework tip  1 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.

FUND.OF CORP.FINANCE PKG. F/BU >C<, Chapter 12, Problem 2P , additional homework tip  2

Where,

  • FUND.OF CORP.FINANCE PKG. F/BU >C<, Chapter 12, Problem 2P , additional homework tip  3 is the expected return of portfolio
  • FUND.OF CORP.FINANCE PKG. F/BU >C<, Chapter 12, Problem 2P , additional homework tip  4 is the weight of the investment or stock
  • FUND.OF CORP.FINANCE PKG. F/BU >C<, Chapter 12, Problem 2P , additional homework tip  5 is the expected return of investment or stock

To ascertain: The expected return of the portfolio.

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