INVESTMENTS(LL)W/CONNECT
INVESTMENTS(LL)W/CONNECT
11th Edition
ISBN: 9781260433920
Author: Bodie
Publisher: McGraw-Hill Publishing Co.
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Chapter 7, Problem 2PS
Summary Introduction

To select: Thereal estate return of which property affects the portfolio risk is to be determined.

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.

Correlation represents the relation between the two data sets. It shows that in which manner it corresponds to the changes in the value of alternate set. When the one data is increased and along with other is also increasing or vice-versa, then it is called as positive Correlation.

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