The Expected Return of a Two Asset Portfolio with a Correlation

question 44

Multiple Choice

The expected return of a two asset portfolio with a correlation coefficient of .35 will be _______________ the weighted average expected return of the portfolio.

• A) below
• B) above
• C) equal to
• D) None of the options are correct

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Definitions:

Cost

The amount of money or resources expended in order to acquire an asset or carry out a specific activity.

Market

A public place or an institution where goods, securities, commodities, or services are traded.

LIFO Method

An inventory valuation method called "Last In, First Out" where the most recently produced items are recorded as sold first.

Ending Inventory

The aggregate worth of merchandise available for purchase at the closing of an accounting cycle.