How do you calculate the expected return of a portfolio composed of 4 assets. Assets A Asset B Asset C Asset D Weight 30% 20% 40% 10% Estimated Return 5% 8% 12% 15% Std Deviation 2% 8% 12% 20% Correct answer - 12.35% What formula do you use to calculate this?

30%*5%+20%*8%+40%*12%+10%*15% = 9.4%

Maratikus, I used the same formula and got the same answer but that answer is wrong… I can send you the correct calculations but would like to wait for few responses before I do that…

i’d take a look at errata then. 9.4% is correct.

I like m’s answer too

def 9.4

Here is their (Adar Review) explanation 12.35% = 0.5*0.1 + 0.3*0.12 + 0.15*0.15 + 0.05*0.3 = 12.350% I have no clue how did they get this numbers…

they used a different set of inputs.