Investor expectations about expected returns from various asset classes should start with:
A)long-term rates of return of those asset classes.
B)last month's rate of return of those asset classes.
C)last year's rate of return of those asset classes.
D)the correlation of returns from asset classes over the past two years.

Question

Quizplus · Accepted Answer

Long-term rates of return provide a better estimate of expected returns than short-term rates of return, which can be more volatile and subject to market fluctuations. It is important for investors to have a long-term perspective when making investment decisions. The correlation of returns is also important, but it should not be the first consideration when assessing expected returns from various asset classes.

Investor Expectations About Expected Returns from Various Asset Classes Should