Assume That Stock Market Returns Do Follow a Single-Index Structure

question 27

Multiple Choice

Assume that stock market returns do follow a single-index structure.An investment fund analyzes 60 stocks in order to construct a mean-variance efficient portfolio constrained by 60 investments.They will need to calculate ________ estimates of expected returns and ________ estimates of sensitivity coefficients to the macroeconomic factor.

• A)200; 19,900
• B)200; 200
• C)60; 60
• D)19,900; 19.900

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Definitions:

Peripheral Vision

The ability to see objects and movement outside of the direct line of vision, which is essential for activities such as driving.

Color-Blind

The inability or decreased ability to see color or distinguish between colors, due to genetic or acquired conditions affecting color perception.

Cones

Cells in the retina known as photoreceptors are crucial for seeing colors and operate optimally under well-lit conditions.

Rods

Photoreceptor cells in the retina of the eye that are highly sensitive to low levels of light and are primarily responsible for night vision.