The average expected rate of return is a
A) volume-weighted average.
B) price-weighted average.
C) probability-weighted average.
D) value-weighted average.

Question

Quizplus · Accepted Answer

The average expected rate of return is a probability-weighted average, as it takes into account the likelihood of different potential returns and weighs them accordingly. Volume-weighted, price-weighted, and value-weighted averages are all methods used to aggregate numerical data, but they are not appropriate for calculating expected rates of return.

The Average Expected Rate of Return Is a