Alpha Forecasts Must Be ____________ to Account for Less-Than-Perfect Forecasting

question 35

Multiple Choice

Alpha forecasts must be ____________ to account for less-than-perfect forecasting quality. When alpha forecasts are ____________ to account for forecast imprecision, the resulting portfolio position becomes ____________.

• A) shrunk; shrunk; far less moderate
• B) shrunk; shrunk; far more moderate
• C) grossed up; grossed up; far less moderate
• D) grossed up; grossed up; far more moderate
• E) None of the options are correct.

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Definitions:

Lens

A transparent structure in the eye that focuses light onto the retina to produce clear images.

Light

Electromagnetic radiation within a certain portion of the electromagnetic spectrum, visible to the human eye and responsible for the sense of sight.

Pupil

The adjustable opening in the center of the eye which allows varying amounts of light to enter the eye.

Pupil

The opening in the iris of the eye that allows light to enter the retina.