Which of the Following Statements Regarding Expected Return of a Portfolio

question 3

Multiple Choice

Which of the following statements regarding expected return of a portfolio is true?

• A)It can be higher than the weighted average expected return of individual assets
• B)It can be lower than the weighted average return of the individual assets
• C)It can never be higher or lower than the weighted average expected return of individual assets
• D)Expected return of a portfolio is impossible to calculate

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Definitions:

Standard Error

A statistical measure of the variance or standard deviation of a sample mean, indicating the precision with which a sample represents a population.

Assembly Lines

Manufacturing processes in which parts are added to a product in a sequential manner using optimally planned workflows to create a finished product much faster than with traditional methods.

Test Statistic

A value calculated from sample data during a hypothesis test used to determine whether to reject the null hypothesis.

Critical Value

A threshold value that defines the boundary of the rejection region in hypothesis testing, beyond which the null hypothesis is rejected.