Assume That Stock Market Returns Do Follow a Single-Index Structure

question 42

Multiple Choice

Assume that stock market returns do follow a single-index structure.An investment fund analyzes 500 stocks in order to construct a mean-variance efficient portfolio constrained by 500 investments.They will need to calculate ________ estimates of firm-specific variances and ________ estimates for the variance of the macroeconomic factor.

• A) 500;1
• B) 500;500
• C) 124,750;1
• D) 124,750;500
• E) 250,000;500

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Definitions:

First Scheduled Job

The initial task or operation planned in a sequence of jobs for production or services.

Processing Times

The duration it takes to complete a particular task, operation, or job from start to finish.

Average Lateness

A measure of the extent to which tasks or deliverables are completed beyond their scheduled completion times, on average.

Average Completion Time

The mean time taken to complete a set of tasks or activities.