POINTS TO REMEMBER
- What is expected return?
- It is the sum of probable returns where the total of probabilities is 1. In terms of an equation:
- It is the sum of probable returns where the total of probabilities is 1. In terms of an equation:
- What is portfolio return?
- It is the weighted average of expected returns from different investments in the portfolio. In terms of an equation:
- It is the weighted average of expected returns from different investments in the portfolio. In terms of an equation:
- What is risk? How is it measured?
- Risk is volatility in returns. It is shown by variance or standard deviation. Standard deviation is the square root of variance. In terms of an equation:
- Risk is volatility in returns. It is shown by variance or standard deviation. Standard deviation is the square root of variance. In terms of an equation:
- What is portfolio risk?
- Portfolio risk is the weighted average ...
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