The expected return on a portfolio is simply a weighted average of the expected returns of the individual asset in the portfolio Consider the following portfolio of two assets where the correlation of returns of the assets is 0 1 Stock Portfolio weight Expected Return Standard Deviation Correlation Microsoft 0 4 12 0 20 10 Coca Cola 0 6 9 5 12 Calculate the expected return of the portfolio Calculate the expected risk of the portfolio

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Question: The expected return on a portfolio is simply a weighted average of the expected returns of the individual asset in the portfolio. Consider the following

The expected return on a portfolio is simply a weighted average of the expected returns of the individual asset in the portfolio. Consider the following portfolio of two assets where the correlation of returns of the assets is 0.1.

Stock	Portfolio weight	Expected Return	Standard Deviation	Correlation
Microsoft	0.4	12.0%	20%	10%
Coca-Cola	0.6	9.5%	12%	10%

Calculate the expected return of the portfolio

Calculate the expected risk of the portfolio

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