rue or false: The expected return of a portfolio is a combination of the weights of each asset in a portfolio.True false question.TrueFalse

The statement is True.

Explanation:

The expected return of a portfolio is calculated as the weighted average of the expected returns of the individual assets in the portfolio. This means that each asset's return contributes to the overall expected return based on its weight in the portfolio.

Mathematically, this can be expressed as:

$E(R_p) = w_1 E(R_1) + w_2 E(R_2) + \ldots + w_n E(R_n)$

Where:

• $E(R_p)$ is the expected return of the portfolio.
• $w_i$ is the weight of asset $i$ in the portfolio.
• $E(R_i)$ is the expected return of asset $i$.

If the weights of each asset and their respective expected returns are correctly identified, the statement holds true. Therefore, the expected return is indeed a combination of the weights of each asset in a portfolio.