Which of the Following Statements Is False

question 3

Multiple Choice

Which of the following statements is false?

• A) The expected return is the return that actually occurs over a particular time period.
• B) If you hold the stock beyond the date of the first dividend, then to compute your return you must specify how you invest any dividends you receive in the interim.
• C) The average annual return of an investment during some historical period is simply the average of the realized returns for each year.
• D) The realized return is the total return we earn from dividends and capital gains, expressed as a percentage of the initial stock price.

---

Definitions:

Variances

Statistical measures of the dispersion or spread in a set of data points, often used to assess the volatility of investment returns.

Perfectly Negatively Correlated

Refers to a relationship where one variable increases exactly as the other decreases, indicating a complete opposite movement between the two.

Standard Deviation

A measure of the amount of variation or dispersion in a set of values, often used to quantify the risk of an investment.

Global-minimum Variance Portfolio

An investment portfolio that is constructed to have the lowest possible risk (variance) for a given rate of return.