Question

Which of the following items are included when calculating the expected return on a portfolio?

1. I. Percentage of the portfolio invested in each individual security
2. II. Projected states of the economy
3. III. The performance of each security given various economic states
4. IV. Probability of occurrence for each state of the economy
Multiple Choice
• I and III only
• II and IV only
• I, III, and IV only
• II, III, and IV only
• I, II, III, and IV

Answer 1

All items I, II, III, and IV are considered when calculating the expected return on a portfolio, which includes the portfolio composition, economic projections, security performance in various economic states, and the probability of those economic states occurring.

option e is the correct

Step-by-step explanation:

When calculating the expected return on a portfolio, several key factors are included.

These are the percentage of the portfolio invested in each security, the projected states of the economy, the performance of each security given various economic states, and the probability of occurrence for each state of the economy.

Therefore, all of the provided items I, II, III, and IV are considered when determining the expected return on a portfolio.