44 Combining Risky and Risk Free Assets

This video explores the impact of combining risky and risk-free assets in a portfolio. We break down how to calculate the expected return of such a combined portfolio, considering the individual returns of risky assets and the risk-free rate. You'll also learn how to determine the portfolio's risk, or variance, and how the presence of a risk-free asset simplifies this calculation significantly. Discover why the portfolio's risk ultimately depends solely on the proportion of risky assets held. Visit AxiomTutoring.com and subscribe to @AxiomTutoringCourses for more valuable financial insights.