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You own 100 share of commonwealth bank and 200 share of vrigin Australia. Would you portfolio...

You own 100 share of commonwealth bank and 200 share of vrigin Australia. Would you portfolio return be different if you instead own shares of Virgin Australia and 200 share of commonwealth bank. Why

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Answer #1

YES, our portfolio return will be different because the weighting of the various share in the overall portfolio will be different so it is not about the presence of stock but it is also about the weighting of various stocks in the portfolio because overall return the portfolio will be determined by a level of diversification and level of Return.

Hence, In this case, we can say that OUR PORTFOLIO RETURN WILL BE DIFFERENT if I have had 200 shares of commonwealth Bank and 100 shares of virgin Australia so it would have helped us in order to get more exposed towards the return of commonwealth Bank, and it will determine our level of overall return in the portfolio differently because of presence of difference in weights of various stocks.

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