which one is false about calculating expected portfilio returns and variances: A

Question

which one is false about calculating expected portfilio returns and variances:

A) U need to calculate the weight of each asset relative to the total portfilio to calculate the portfilio return and the portfilio variance   B) Portfilio return can be calculated using the expected return and portfilio weight for each asset   C)   Portfilio return is needed to calculate portfilio variance   D) portfilio return and variance are dependant on the possible states of nature E) the portfilio variance is a weighted average of the variances of the individual assets of the portfilio

Explanation / Answer

Answer: Option C.

Option (E) is also not appropriate, as portfolio variance is not the weighted average of variances of the invidual assets. It takes into account covariance between securities also.

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.