combinations which can be created from portfolios comprised of two individual assets is called the investment opportunity set.
Portfolio risk consists of 2 components: systemic risk and diversifiable risk. Systemic risks, also known as systematic risks, are risks affecting all assets, such as general economic conditions, and, thus, systemic risk is not reduced by diversification.
The basic expected return formula involves multiplying each asset's weight in the portfolio by its expected return, then adding all those figures together. In other words, a portfolio's expected return is the weighted average of its individual components' returns.
Portfolio return refers to the gain or loss realized by an investment portfolio containing several types of investments. Portfolios aim to deliver returns based on the stated objectives of the investment strategy, as well as the risk tolerance of the type of investors targeted by the portfolio
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