rue or false: The expected return of a portfolio is a combination of the weights of each asset in a portfolio.True false question.TrueFalse
Question
rue or false: The expected return of a portfolio is a combination of the weights of each asset in a portfolio.True false question.TrueFalse
Solution
True. The expected return of a portfolio is indeed a combination of the weights of each asset in the portfolio. This is calculated by multiplying the return of each asset by its weight in the portfolio and then summing these values.
Similar Questions
The return on a portfolio is a combination of the expected returns on the assets in the portfolio.
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There are two ways to calculate the expected return of a portfolio. Either calculate the expected return using the value and dividend stream of the portfolio as a whole, or calculate the weighted average of the expected returns of the individual shares that make up the portfolio. Which return is higher? (Select the best choice below.) A. Neither-both calculations give the same answer. B. The weighted average expected return of the individual shares is higher because returns are concave. C. The weighted average expected return of the individual shares is higher because returns are convex. D. Impossible to tell, it depends on the portfolio.
For example, if you have a portfolio that is made up of 50% stocks and 50% bonds, and the expected return on stocks is 10%, and the expected return on bonds is 5%, then your expected return would be calculated as:
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