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Assume that stock market returns do not resemble a single-index structure. An investment fund analyzes 100 stocks in order to construct a mean-variance efficient portfolio constrained by 100 investments. They will need to calculate _____________ expected returns and ___________ variances of returns.
Marginal Efficiency
The expected profitability of investing in additional units of capital, influencing a firm's decision to invest based on future returns.
Net Investment
The total spending on new capital minus the depreciation on existing capital, indicating the growth of a company's or nation's capital stock.
Inventory Investment
The stock of goods or merchandise kept by a business with the intent to sell it for profit.
Depreciation
A measure of the decrease in value of an asset over time, often due to wear and tear or obsolescence.
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