The Expected Rate of Return of a Portfolio of Risky

question 61

Multiple Choice

The expected rate of return of a portfolio of risky securities is ________.

• A) the sum of the securities' covariance
• B) the sum of the securities' variance
• C) the weighted sum of the securities' expected returns
• D) the weighted sum of the securities' variance

---

Definitions:

Addition Rule

In probability, a rule that calculates the likelihood of any of two or more mutually exclusive events occurring.

Automobile Accident

An unexpected event involving a vehicle that usually results in damage and/or injury.

Mutually Exclusive

Events or conditions that cannot occur simultaneously or cannot both be true at the same time.

Addition Rule

A principle in probability theory that determines the probability of the occurrence of at least one of two events, taking into account their joint probability if they are not mutually exclusive.