HW 8, Q3

Please help me solve this. I only have 1 attempt and after that is it not possible to get full points, so please double check the answers before you post them. Thank you in advance!

3. Portfolio expected return and risk Aa Aa A collection of financial assets and securities is referred to as a portfolio. Most individuals and institutions invest in a portfolio, making portfolio risk analysis an integral part of the field of finance. Just like stand-alone assets and securities, portfolios are also exposed to risk. Portfolio risk refers to the possibility that an investment portfolio will not generate the investor's expected rate of return Analyzing portfolio risk and return involves the understanding of expected returns from a portfolio. Consider the following case: holds a small portfolio consisting of only four stocks. The stock holdings in Andre is an amateur investor wh portfolio are shown in the following table: Standard Percentage of Expected Stock Portfolio Return Deviation Artemis Inc. 20% 8.00% 37.00% Babish & Co. 30% 14.00% 41.00% 35% Cornell Industries 11.00% 44.00% Danforth Motors 15% 3.00% 46.00% What is the expected return on Andre's stock portfolio? 10.10% 15.15% 13.64% 7.58% Suppose each stock in Andre's portfolio has a correlation coefficient of 0.4 (p 0.4) with each of the other stocks. If = the weighted average of the risk of the individual securities (as measured by their standard deviations) included in the partially diversified four-stock portfolio is 42%, the portfolio's standard deviation (ap) most likely is 42%