The expected value and standard deviation of the rate of return based on his portfolio. Introduction: Investment Portfolio: An investor has an option of investing in two types of assets, namely risky assets and risk -free assets. When an investor desiresto reduce risks or does not aim to take any sort of risk, he/she chooses to invest in risk-free assets. But, when the investor wants more returns and is prepared to take the risk, he/she invests in risky assets.Hence, collection of the types of assets held by investor or institution can be defined as investment portfolio. There are some investors who invest combined in risky and risk-free assets to reduce the risk.

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Chapter 6, Problem 13PS

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To calculate:The expected value and standard deviation of the rate of return based on his portfolio.

Introduction:

Investment Portfolio: An investor has an option of investing in two types of assets, namely risky assets and risk -free assets. When an investor desiresto reduce risks or does not aim to take any sort of risk, he/she chooses to invest in risk-free assets. But, when the investor wants more returns and is prepared to take the risk, he/she invests in risky assets.Hence, collection of the types of assets held by investor or institution can be defined as investment portfolio. There are some investors who invest combined in risky and risk-free assets to reduce the risk.

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