Asked by Nigel Sonnier on Sep 27, 2024
The expected return of a two-asset portfolio is equal to the product of the weight assigned to the first asset and the expected return of the first asset plus the product of the weight assigned to the second asset and the expected return of the second asset.
Expected Return
The weighted average of all possible returns for an investment, based on the probabilities of each outcome.
Portfolio
A portfolio is a collection of financial investments like stocks, bonds, commodities, cash, and cash equivalents, including closed-end funds and exchange traded funds (ETFs).
- Understand the principles of portfolio theory in a financial context.
Learning Objectives
- Understand the principles of portfolio theory in a financial context.
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