True or False: The expected return of the sum of two investments will be equal to the sum of the
expected returns of the two investments plus twice the covariance between the investments.

Question

Quizplus · Accepted Answer

The expected return of the sum of two investments is equal to the sum of their expected returns, without involving the covariance. Covariance affects the variance of the sum, not the expected return.

True or False: the Expected Return of the Sum of Two