The Portfolio Expected Return of Two Investments

question 148

Multiple Choice

The portfolio expected return of two investments

• A)will be higher when the covariance is zero.
• B)will be higher when the covariance is negative.
• C)will be higher when the covariance is positive.
• D)does not depend on the covariance.

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Definitions:

IFRS

International Financial Reporting Standards, which are a set of accounting standards developed by the International Accounting Standards Board (IASB) used globally to prepare public company financial statements.

Statement of Changes in Equity

A financial report that outlines the movements in equity of a company over a specific period, including profits or losses, dividends issued, and any changes in share capital.

Common Shares

Equity securities that represent ownership in a company, entitling the holder to vote at shareholders' meetings and to share in the company's profits through dividends.

Dividends Declared

Refers to the announcement by a company's board of directors of the payment of a dividend to shareholders, specifying the size and date of the payment.