Which of the Following Is not a Technique for Constructing

question 9

Multiple Choice

Which of the following is not a technique for constructing a passive index portfolio?

• A) Full replication
• B) Sampling
• C) Quadratic programming
• D) Linear programming
• E) None of the above (that is, all are techniques for constructing a passive index portfolio)

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Definitions:

Book Value

The net value of a company's assets minus its liabilities, as recorded on the balance sheet, often used to calculate the value of a company if it were to be liquidated.

Opportunity Cost

The price paid when one opts not to pursue the next most favorable choice during decision-making.

Cash Outlay

The actual amount of money spent or disbursed on goods, services, or assets.

Alternative Investments

Investments in asset classes other than stocks, bonds, and cash, including real estate, hedge funds, private equity, and commodities.