The Expected Return of the Sum of Two Investments Will

question 72

True/False

The expected return of the sum of two investments will be equal to the sum of the expected returns of the two investments plus twice the covariance between the investments.

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Definitions:

Aggregate Demand

The entirety of demand for goods and services within an economy, at a chosen general price level and throughout a specified time period.

Aggregate Supply

The total supply of goods and services that firms in an economy are willing to sell at a given price level in a given time period.

Investment

The purchase of goods that are not consumed today but are used in the future to create wealth, including assets like property, stocks, or bonds.

Aggregate Demand Curve

Curve showing planned purchase rates for all goods and services in the economy at various price levels.