Asked by Viviana Gomez on May 07, 2024
Verified
The expected return of the portfolio considers the performance of each stock given various economic scenarios.
Expected Return
The projected average return on an investment over a given period.
Economic Scenarios
Hypothetical constructs detailing possible future economic conditions, used for planning and risk assessment purposes.
Stock Performance
It refers to the return on investment in a company's stock, taking into account capital appreciation and dividends, over a specified period.
- Understand the critical role of assessing the probability of diverse economic situations in predicting the expected gain of a portfolio.
Verified Answer
NG
Nazih GhqndourMay 08, 2024
Final Answer :
True
Explanation :
The expected return of a portfolio takes into account the performance of each stock within it across different economic scenarios, weighting their returns by their respective probabilities.
Learning Objectives
- Understand the critical role of assessing the probability of diverse economic situations in predicting the expected gain of a portfolio.