To Determine the Optimal Risky Portfolio in the Treynor-Black Model

question 19

Multiple Choice

To determine the optimal risky portfolio in the Treynor-Black model, macroeconomic forecasts are used for the _________, and composite forecasts are used for the __________.

• A) passive index portfolio; active portfolio
• B) active portfolio, passive index portfolio
• C) expected return; standard deviation
• D) expected return ; beta coefficient
• E) alpha coefficient; beta coefficient

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Definitions:

Tax Revenue

The income collected by the government from taxes.

National Debt

The cumulative sum of funds borrowed by a nation's government, usually due to spending more than it earns.

Budget Deficits

The situation where a government's expenditures exceed its revenues in a given fiscal period, leading to borrowing or printing of money.

National Debt

The all-encompassing volume of money borrowed by a nation's government through different strategies.