The Weights That Are Commonly Used When Computing the Expected

question 205

True/False

The weights that are commonly used when computing the expected return of a portfolio given various economic scenarios are based on the probability of each economic scenario occurring.

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Definitions:

Occurrence

An event or incident that happens or takes place.

Experiment

A scientific procedure undertaken to make a discovery, test a hypothesis, or demonstrate a known fact.

Mutually Exclusive

Refers to events that cannot occur at the same time.

P(C)

The probability of occurrence of event C.