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Assume that an investor decides to hold a portfolio with 80 percent invested in GE stock and the remaining 20 percent invested in Apple Inc. stock. The expected return is 9.93 percent for the GE stock and 18.20 percent for the Apple Inc. stock. The risk (standard deviation) is 16.21 percent for the GE stock and 33.11 percent for Apple Inc. stock. What will be the portfolio's expected return given that the covariance between the two stocks is 0.5 percent or 0.0050

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Based on the returns given and their weights and other factors, the portfolio expected return will be 11.58%.

What is Portfolio Expected Return?

This is the weighted average of the returns of the individual stocks and their weight in the portfolio.

Expected Return of this Portfolio.

= (Weight of GE stock x expected return of GE stock) + (Weight of Apple stock x expected return on Apple stock)

= (80% x 9.93%) + (20% x 18.20%)

= 11.58%

In conclusion, the expected return is 11.58%.

Find out more on portfolio expected return at https://brainly.com/question/10706452.

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