Portfolio return:

Portfolios are a combination of investments in risky common equity stocks, bonds & risk free assets in various proportions. We can lower Portfolio risks by diversification. Portfolios can be generated in such a way, so that portfolio returns are higher and risks of investments are lowered, than by investing in risky securities.

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Data-

• Total portfolio Investment = \$1,000
• Expected returns from investing in risk free asset = Return 1 = 4.0% = 0.04
• Expected returns from investing...

Portfolio Weight, Return & Variance: Definition & Examples

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Chapter 12 / Lesson 1
20K

A portfolio can be designed in several different ways. It is important to understand the basics of a portfolio before building and managing one. In this lesson, we will go over the weight, return, and variance of a portfolio.