When Shares with the Same Expected Return Are Combined into a Portfolio

question 31

Multiple Choice

When shares with the same expected return are combined into a portfolio:

• A)the expected return of the portfolio is less than the weighted average expected return of the shares.
• B)the expected return of the portfolio is greater than the weighted average expected return of the shares.
• C)the expected return of the portfolio is equal to the weighted average expected return of the shares.
• D)there is no relationship between the expected return of the portfolio and the expected return of the shares.
• E)None of the above.

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Definitions:

Colonization

The action or process of settling among and establishing control over the indigenous people of an area.

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The ability to fluently speak and understand two languages, which may influence cognitive processes and cultural perspectives.

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A display of boldness or swagger intended to impress or intimidate, often without the intention or ability to follow through.