The realized return on a stock portfolio is the weighted average of the expected returns on the stocks in the portfolio.

Question

Quizplus · Accepted Answer

The realized return on a stock portfolio is not the weighted average of the expected returns on the stocks in the portfolio, as it takes into account the actual returns earned on each stock, which may differ from their expected returns. The formula for realized return is:
Realized return = ∑(weight of stock i x return on stock i) for all stocks in the portfolio.

The Realized Return on a Stock Portfolio Is the Weighted