{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Example suppose you invest 50 of your portfolio in

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: of n stocks is: n (28) Portfolio return ¦w r ii i1 Where wi denotes the fraction of the portfolio invested in stock i and r i is the expected return on stock i. Example: - Suppose you invest 50% of your portfolio in Nokia and 50% in Nestlé. The expected return on your Nokia stock is 15% while Nestlé offers 10%. What is the expected return on your portfolio? - Portfolio return n ¦w r ii 0.5 ˜ 15%  0.5 ˜ 10% 12.5% i1 - A portfolio with 50% invested in Nokia and 50% in Nestlé has an expected return of 12.5%. Please click the advert Fast-track your career Masters in Management Stand out from the crowd Designed for graduates with less than one year of full-time postgraduate work experience, London Business School’s Masters in Management will expand your thinking and provide you with the foundations for a successful career in business. The programme is developed in consultation with recruiters to provide you with the key skills that top employers demand. Through 11 months of full-time study, you will gain the business knowledge and capabilities to inc...
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online