Asked by Khalid Ahmed Daamseh on May 20, 2024
Verified
Which one of these statements is correct concerning expected and unexpected returns?
A) Total return is equal to the expected return.
B) The unexpected return is solely related to unsystematic risk.
C) The unexpected return is solely related to systematic risk.
D) The unsystematic portion of the surprise component of a return is diversifiable risk.
E) Total return is equal to the expected return minus the surprise.
Unexpected Returns
Returns on an investment that exceed what is predicted by models or expected based on historical trends, often caused by unforeseen factors or events.
Expected Returns
The anticipated amount of profit or loss an investor predicts to receive from an investment, taking into account the possibility of fluctuating values.
Unsystematic Risk
The hazard pertaining to an individual business or field, which can be reduced by diversifying assets.
- Acquire knowledge of the variables that impact the predicted yields on stocks and their calculation process.
Verified Answer
Learning Objectives
- Acquire knowledge of the variables that impact the predicted yields on stocks and their calculation process.
Related questions
Which One of the Following Events Is Considered Part of ...
Use the Following Information to Calculate Your Company's Expected Return ...
Research Has Identified Two Systematic Factors That Affect U ...
BCInc(BCI) Pays an Annual Dividend of $2 Per Share ...
If Two Constant Growth Stocks Have the Same Price and ...