... only existing assets not new issues." (Keith Pilbean, finance & financial markets, published 1998, page 130). The return of assets on a portfolio can be observed by the next expression: N Rp=?wiE(Ri) I=1 Where we can say, that Rp is the price weighted return on a portfolio of risky assets, wi is the price-weighted proportion of a portfolio spent in asset i, Ri is the return on the asset i in the portfolio and N is the amount of securities in the investors portfolio. Furthermore, the average expected return on the portfolio is shown by the following expression, where E (Ri) shows the average expected return on asset I, and the E (Rp) is the average expected return on the portfolio. N E(Rp)=?wiE(Ri) i=1 If we consider two securities A and B, and assume that security A has a higher expected return plus a lower standard deviation than security B ...

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