Which of the Following Affect the Expected Rate of Return

question 26

Multiple Choice

Which of the following affect the expected rate of return for a portfolio?
I. weight of each security held in the portfolio
II. the probability of various economic states occurring
III. the variance of each individual security
IV. the expected rate of return of each security given each economic state

• A)I and IV only
• B)II and IV only
• C)II, III, and IV only
• D)I, II, and IV only
• E)I, II, III, and IV

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Definitions:

Agency Agreement

A legal contract creating a fiduciary relationship whereby the first party ("the principal") agrees that the actions of a second party ("the agent") binds the principal to later agreements made by the agent as if the principal had himself personally made the later agreements.

Dual Agency

A situation in real estate where an agent or broker represents both the buyer and the seller in the same transaction, leading to potential conflicts of interest.

Conflict of Interest

A situation in which an individual's personal interests could potentially interfere with their professional duties or responsibilities.

Safe Working Conditions

Work environments that possess adequate safety measures to prevent accidents and reduce the risk of injury or harm to employees.