2.10 SUMMARY OF PORTFOLIO STATISTICS
The return and risk of a portfolio are measured by calculating the portfolio mean (or expected return) and the portfolio volatility (or standard deviation). Operationally, these statistics are defined as follows.
Given a portfolioa, the expected return of the portfolio is:
if using sample means, the portfolio mean is:
Similarly, the portfolio variance is well defined for both the population variance,
and the sample variance:
Finally, the portfolio's volatility or standard deviation is defined as the square root of the portfolio variance.
In topic 2.11 we apply these concepts to two examples.
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