Which of the following statements is not true?
A) Expected return is the estimated future return.
B) Expected return is often estimated using historical averages.
C) Expected return can be calculated using weights to represent the probabilities of possible returns.
D) Using historical averages to calculate expected return is the best method to use for short-term forecasts.

Question

Quizplus · Accepted Answer

Expected return can indeed be calculated using historical averages, but stating that using historical averages is the "best" method for short-term forecasts is not accurate. The effectiveness of historical averages for short-term forecasts can be limited due to market volatility and unpredictability in the short term. Other methods, such as technical analysis or more sophisticated statistical models, might be more appropriate for short-term forecasting.

Which of the Following Statements Is Not True