When Computing the Expected Return on a Portfolio of Stocks

question 61

Multiple Choice

When computing the expected return on a portfolio of stocks the portfolio weights are based on the:

• A)number of shares owned in each stock.
• B)price per share of each stock.
• C)market value of the total shares held in each stock.
• D)original amount invested in each stock.
• E)cost per share of each stock held.

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Definitions:

Flawed Units

items that have defects or do not meet the quality standards set by the manufacturer or industry, rendering them less valuable or unsellable.

Substitute Goods

Products or services that can be used in place of each other, satisfying the same consumer needs or desires.

Complementary Goods

Products or services that are used together, where the use or consumption of one enhances the value of the other.

Demand SHIFT

A change in the market demand curve, where at every price level, the quantity demanded of a good increases or decreases due to factors other than its price such as consumer preferences, income, or the price of other goods.