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

A It is a weighted average only for stock portfolios
B It can only be positive
C It can never be above the highest individual return
D All of the above are true

Correct Answer: It can never be above the highest individual return

It can never be above the highest individual return is true regarding the expected return of a portfolio. The expected return for an investment portfolio is the weighted average of the expected return of each of its components.
Bissoy MCQ
#Commerce #Financial Management

Related Questions

The Head of a newly formed government desires to appoint five of the six elected members A,B,C,D,E and F to portfolios of Home,Power,Defence ,Telecom and Finance.F dose not want any portfolio if D gets one the five.C wants either Home or Finance or on portfolio.B says that if D gets either Power or Telecom then she must get the other one.E insists on a portfolio if A gets one. Which is a valid assignment ?
A B-Home, F-Power,E-Defence,C-Telecom ,A-Finance
B A-Home, B-Power,E-Defence,D-Telecom ,F-Finance
C C-Home, D-Power,A-Defence,B-Telecom ,E-Finance
D A-Home, B-Power,C-Defence,D-Telecom ,E-Finance
The Head of a newly formed government desires to appoint five of the six elected members A,B,C,D,E and F to portfolios of Home,Power,Defence ,Telecom and Finance.F dose not want any portfolio if D gets one the five.C wants either Home or Finance or on portfolio.B says that if D gets either Power or Telecom then she must get the other one.E insists on a portfolio if A gets one. If a gets Home and C gets Finance,then which is NOT a valid assignment for Defence and Telecom?
A B-Defence,D-Telecom
B B-Defence,E-Telecom
C F-Defence,B-Telecom
D D-Defence,B-Telecom
A line which shows relationship between an expected return and risk on efficient portfolio is considered as
A efficient market line
B attributable market line
C capital market line
D security market line
Risk on a stock portfolio which cannot be eliminated or reduced by placing it in diversified portfolio is classified as
A diversifiable risk
B market risk
C stock risk
D portfolio risk
Risk on a stock portfolio which can be reduced by placing it in diversified portfolio is classified as
A stock risk
B portfolio risk
C diversifiable risk
D market risk
An expected dividend yield is subtracted from an expected rate of return which is used to calculate
A specialized growth rate
B capital gains yield
C casual growth yield
D past growth rate
An accounting approach, in which expected benefits exceed expected cost is classified as
A benefit approach
B cost approach
C cost-benefit approach
D accounting approach
Budget which calculates expected revenues and expected costs, based on actual output quantity is named as
A flexible budget
B fixed budget
C variable budget
D multiplied budget
According to ADB/World bank, the expected GDP growth rate of Bangladesh in the current fiscal year is expected to be close to :
A 9%
B 8%
C 7%
D 5%
Premium which is considered as difference of expected return on common stock and current yield on Treasury bonds is called
A current risk premium
B past risk premium
C beta premium
D expected premium

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