The Total Number of Variance and Covariance Terms in Portfolio

question 7

Multiple Choice

The total number of variance and covariance terms in portfolio is N². How many of these would be (including non-unique) covariances?

• A) N.
• B) N².
• C) N²- N.
• D) N²- N/2.

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Definitions:

Expectancy Theory

A motivational theory suggesting that individuals are more likely to act in a certain way if they expect that the action will lead to a desired outcome or reward.

Motivation

A psychological force that compels individuals to act toward the achievement of goals.

Attractiveness

The qualities or features of an entity that make it appealing or desirable to others.

Predetermined Wage Grades

An established set of salary levels defined before recruitment, often based on job analysis, to classify positions according to value and responsibility.