Question: Diversification, Expected Returns, and Systematic Risk The portfolio expected return is equal to the weighted average of the expected returns of each individual security Likewise,

Diversification, Expected Returns, and Systematic Risk The portfolio expected return is equal to the weighted average of the expected returns of each individual security Likewise, the portfolio beta is equal to the weighted average of the betas of each security Example: E(rM)=12%,M=1,amountinvested=$6000E(rrf)=5%,rf=0,amountinvested=$4000 What is the expected return and beta of this portfolio

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