An Unbiased Estimator Achieves What Sort of Property

question 38

Multiple Choice

An unbiased estimator achieves what sort of property?

• A) Its variance is the lowest of all possible estimators.
• B) Its mean is equal to the population parameter it is used to estimate.
• C) Its loss function is the squared loss function.
• D) It will always have an equal number of positive and negative errors.

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Definitions:

Beta

A measure of the volatility, or systematic risk, of a security or portfolio compared to the entire market.

Portfolio P

This term typically represents a specific set of investments held by an individual or organization, potentially including stocks, bonds, and other assets.

Required Return

The minimum return an investor expects to achieve by investing in a particular asset, taking into account its risk level.

Risk-Free Rate

The theoretical rate of return of an investment with zero risk, representing the interest an investor would expect from an absolutely risk-free investment over a specified period.