The weights that are commonly used when computing the expected return of a portfolio given various economic scenarios are based on the amount invested in each security held in the portfolio.

Question

Quizplus · Accepted Answer

The weights used in computing the expected return of a portfolio are indeed based on the proportion of the total investment allocated to each security within the portfolio. These weights reflect the relative importance or contribution of each security to the portfolio's overall performance.

The Weights That Are Commonly Used When Computing the Expected