There are two ways to calculate the expected return of a portfolio: Either calculate the expected return using the value and dividend stream of the portfolio as a whole, or calculate the weighted average of the expected returns of the individual stocks that make up the portfolio. Which return is higher? (Select the best choice below.) A. The weighted average expected return of the individual stocks is higher because returns are concave. B. Impossible to tell, it depends on the portfolio. C. Neitherboth calculations give the same answer. D. The weighted average expected return of the individual stocks is higher because returns are convex.

In any given business calculation that is expected to arrive at a particular solution, the solution obtained would always be the same irrespective of the method adopted. For the example, the case of expected return of a portfolio in a business, the calculation would definitely give the same answer when two methods are adopted.