Assume That Stock Market Returns Do Not Resemble a Single-Index

question 70

Multiple Choice

Assume that stock market returns do not resemble a single-index structure. An investment fund analyzes 40 stocks in order to construct a mean-variance efficient portfolio constrained by 40 investments. They will need to calculate ____________ covariances.

• A) 45
• B) 780
• C) 4,950
• D) 10,000

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Definitions:

Biological

Pertains to the processes and phenomena associated with living organisms, often emphasizing the genetic, neurological, and physiological aspects.

Psychological Problems

Conditions affecting an individual's mental state, potentially disrupting their emotional, psychological, and social well-being.

Diathesis-stress Model

The diathesis-stress model is a psychological theory that explains behavior as a result of a predispositional vulnerability together with stress from life experiences.

Genetic Factors

Hereditary aspects and contributions to an individual's traits, behaviors, and predispositions, passed from parents to offspring through genes.