If the actual return on an investment is different from the expected return, then it is likely that:
A) When investors estimated the expected return they correctly weighed all of information that they believed would bear on the investment.
B) Interest rates remained unchanged after the expected return was computed.
C) Even though the expected return was incorrect, the normal return was estimated accurately.
D) Some unanticipated information about the investment was revealed after the expected return was computed.
E) Investors didn't use all relevant information that was available when computing the expected return.

Question

Quizplus · Accepted Answer

The actual return differing from the expected return often indicates that new, unanticipated information has come to light after the expected return was computed, affecting the investment's performance.

If the Actual Return on an Investment Is Different from the Expected