The Single-Index Model

question 36

Multiple Choice

The single-index model

• A)greatly reduces the number of required calculations relative to those required by the Markowitz model.
• B)enhances the understanding of systematic versus nonsystematic risk.
• C)greatly increases the number of required calculations relative to those required by the Markowitz model.
• D)greatly reduces the number of required calculations relative to those required by the Markowitz model and enhances the understanding of systematic versus nonsystematic risk.

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Definitions:

Transparency

The practice of being open, honest, and straightforward about various activities, making information accessible and understandable to stakeholders.

Stakeholder Responsibility

The obligations that individuals, groups, or organizations have towards others within and outside an organization who are affected by or have an interest in their actions and decisions.

Obligations

Duties or commitments that an individual or organization is bound to fulfil, often legally or morally.

Identifiable Groups

Collections of individuals who are recognizable by specific characteristics, attributes, or affiliations.