Question.3425 - 1. Explain the difference between required rate of return and expected rate of return. If they are different at a specific point in time, what does it mean? 2. What is the difference between an expected return and a total holding period return?3. How does investing in more than one asset reduce risk through diversification?
Answer Below:
Explain xxx difference xxxxxxx required xxxx of xxxxxx and xxxxxxxx rate xx return xx they xxx different xx a xxxxxxxx point xx time xxxx does xx mean xxx required xxxx of xxxxxx RRR xx the xxxxx return xx investor xxxxxxx to xxxxxxxxxx the xxxx of x specific xxxxxxxxxx most xxxxxxxx impacted xx factors xxxx as xxxxxxxxx risk xxxxxxx and xxxxxxxxxxx cost xxxxx et xx On xxx other xxxx the xxxxxxxx rate xx return xxx is x prediction xx the xxxxxx an xxxxxxxx expects xxxxx on xxxxxxxxxx performance xxxxxx conditions xx projections xxxx the xxx is xxxx than xxx ERR xx considers xxxx the xxxxxxxxxx may xxx be xx to xxx investors xxxx expectations xxxxx could xxxx them xx avoid xx sell xxx asset xxxxxxxxx if xxx ERR xxxx more xxxx the xxx the xxxxxxxxxx may xx seen xx credible xxx worth xxxxx forward xxxx it xxxx is xxx difference xxxxxxx an xxxxxxxx return xxx a xxxxx holding xxxxxx return xxx expected xxxxxx is xx already xxxxxxxxx percentage xxxx a xxxxxxxxxx period xxxxxxx the xxxxx holding xxxxxx return xxxxx both xxxxxxx appreciation xxx income xxxx as xxxxxxxxx or xxxxxxxx earned xxxxxx the xxxxx period xxxx consideration xxx does xxxxxxxxx in xxxx than xxx asset xxxxxx risk xxxxxxx diversification xxxxxxxxx out xxxxxxxxx risks xx splitting xxxxxxxxxxx across xxxxxxx assets xxxxxxxxx in xxxxxxxx the xxxxxxxx to xxx any xxx assets xxxxxxxxxxxxx Markowitz xxxx method xxxx efficiently xxxx unsystematic xxxxx which xxx particular xx individual xxxxxx as xxx weak xxxxxxxxxxx of xxx investment xxx be xxxxxxx by xxx better xxxxxxxxxxx of xxxxxx finally xxxxxxx to x more xxxxxxxxxx portfolio xxxxxxxxxx Bodie x Kane x Marcus x J xxxxxxxxxx of xxxxxxxxxxx th xx McGraw-Hill xxxxxxxxx Markowitz x Portfolio xxxxxxxxx The xxxxxxx of xxxxxxx - xxxxx doi xxxMore Articles From Management
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