The Expected Return on a Portfolio

question 34

Multiple Choice

The expected return on a portfolio:
I. can never exceed the expected return of the best performing security in the portfolio.
II. must be equal to or greater than the expected return of the worst performing security in the portfolio.
III. is independent of the unsystematic risks of the individual securities held in the portfolio.
IV. is independent of the allocation of the portfolio amongst individual securities.

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

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Definitions:

Sales

The activities involved in selling goods or services to customers, often measured by the amount of revenue generated.

Rivals

Competitors within the same industry or market vying for the same customer base.

Concentration Ratios

A measure used to determine the level of competition within an industry by analyzing the market share of the largest firms within that market.

Industry Sales

The total revenue generated within a specific industry from the sale of goods and services.