Question

In: Finance

Historical rate of return is based on the past and expected rate of return is based...

Historical rate of return is based on the past and expected rate of return is based future probability.

Select one
a. True
b. False

Solutions

Expert Solution

Correct Answer-(a) True.

Reason-

Historical rate of return is alos known as the average historical return. It is calculated on the basis of past performance or past return.

Expected rate of return is the expected value of the probability distribution of the possible future returns.

Expected return =

jeff jeffy answered 2 years ago
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