Macro Events Only Are Reflected in the Performance of the Market

question 62

Multiple Choice

Macro events only are reflected in the performance of the market portfolio because:

• A) the market portfolio contains only risk-free securities.
• B) only macro events are tracked by economists.
• C) the specific risks have been diversified away.
• D) the firm-specific events would be too numerous to quantify.

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Definitions:

Lower Quartile

The value below which 25% of the data falls, also known as the first quartile.

Weights

Values assigned to various elements in a computation to reflect their importance.

Police Officers

Members of law enforcement agencies who are empowered to enforce the law, protect property and the lives of citizens, and prevent crime and civil disorder.

Whiskers

In a box plot, lines that extend from the quartiles to the highest and lowest values, excluding outliers, to show the range of the data.