What is meant by expected returnDescribe how expected return of-02261
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vu mth302 Business Mathematics & Statistics.
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vu mth302 Mid Term Solved Past Paper No. 2.
Question 1: What is meant by expected returnDescribe how expected return of a portfolio is calculated.
Answer:
Expected return
The average of a probability distribution of possible returns, The expected return on any portfolio is easily calculated as a weighted average of the individual securities expected returns. The percentages of a portfolio's total value that are invested in each portfolio asset are referred to as portfolio weights, which will denote by w.
The combined portfolio weights are assumed to sum to 100 percent of, total investable funds, or 1.0, indicating that all portfolio funds are invested.
