Asked by Amber Koeuth on May 13, 2024
Verified
The realized return on a stock portfolio is the weighted average of the expected returns on the stocks in the portfolio.
Expected Returns
The anticipated return on an investment, considering both the probability and the amount of potential returns.
Realized Return
The actual gain or loss achieved on an investment over a specific period, taking into account both income and capital gains.
Stock Portfolio
A collection of stocks owned by an individual or an institution, diversified to spread risk.
- Become familiar with risk evaluation measures like variance, standard deviation, and the coefficient of variation.
Verified Answer
DA
Damon AdamsMay 15, 2024
Final Answer :
False
Explanation :
The realized return on a stock portfolio is the actual return earned by the investor, which is not necessarily the same as the expected return. The expected return is a forecast of what the return might be based on mathematical models and historical data. The realized return reflects the actual performance of the portfolio and takes into consideration factors such as unexpected events and changes in market conditions. Therefore, the realized return on a stock portfolio is not necessarily the weighted average of the expected returns on the stocks in the portfolio.
Learning Objectives
- Become familiar with risk evaluation measures like variance, standard deviation, and the coefficient of variation.