You Are Computing the Expected Return on a Portfolio of Six

Multiple Choice

You are computing the expected return on a portfolio of six stocks given three states of the economy. How will the expected return of the portfolio be computed given an economic state?

A) Add up the returns on each stock and divide by 6
B) Sum up the returns on each stock and divide by (6 - 1)
C) Multiply the individual returns with the weights based on the market value of each of the stock position
D) Multiply the individual returns with the weights based on the relative prices of each stock position
E) Multiply the individual returns with the weights based on the number of shares of each stock owned