Which of the Following Statements Is FALSE

question 123

Multiple Choice

Which of the following statements is FALSE?

• A)Without trading,the portfolio weights will decrease for the stocks in the portfolio whose returns are above the overall portfolio return.
• B)The expected return of a portfolio is simply the weighted average of the expected returns of the investments within the portfolio.
• C)Portfolio weights add up to 1 so that they represent the way we have divided our money between the different individual investments in the portfolio.
• D)A portfolio weight is the fraction of the total investment in the portfolio held in an individual investment in the portfolio.

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Definitions:

Respective Weights

The individual importance or influence assigned to different factors or variables in a calculation, decision-making process, or model.

Representative

Someone who acts on behalf of another person or group, or an example that typifies or stands for a larger group or class.

American Teens

Adolescents who are citizens or residents of the United States, typically characterized by their experiences within American culture.

Negative Correlation

A relationship between two variables in which one variable increases as the other decreases.