Which of the following portfolio values are weighted average?
I. Expected return
II. Standard deviation
III. Correlation
IV. Beta
A) I and III
B) I and IV
C) II and III
D) II and IV
E) I, II and IV

Question

Quizplus · Accepted Answer

Expected return and Beta are both calculated as weighted averages in portfolio management. Expected return is the weighted average of the returns of the individual assets in the portfolio, based on their proportions in the portfolio. Beta, a measure of a stock's volatility in relation to the overall market, is also calculated as a weighted average for a portfolio, reflecting the weighted sum of the individual betas of the portfolio's components. Standard deviation and correlation, however, are not calculated as weighted averages; standard deviation is a measure of the dispersion of returns, and correlation measures the relationship between two variables' movements.

Which of the Following Portfolio Values Are Weighted Average