An investor decides to split his money equally among four securities with the following expected returns: 10%, 15%, 23%, and 26%. The expected return on his portfolio is

Question

Quizplus · Accepted Answer

The expected return on the portfolio is the average of the expected returns of the individual securities since the money is split equally among them. Thus, (10% + 15% + 23% + 26%) / 4 = 18.5%.

An Investor Decides to Split His Money Equally Among Four