The long-term return on a portfolio is influenced by
A) asset allocation.
B) the market risk premium.
C) the level of interest rates.
D) all of the above.

Question

Quizplus · Accepted Answer

The long-term return on a portfolio is influenced by asset allocation, the market risk premium, and the level of interest rates. Asset allocation determines the mix of assets and is a major determinant of a portfolio's risk and return. The market risk premium influences the return investors expect for taking on higher risk, and interest rates affect the cost of borrowing and the return on fixed-income investments.

The Long-Term Return on a Portfolio Is Influenced by