In the Treynor-Black Model, the Weight of Each Analysed Security

question 5

Multiple Choice

In the Treynor-Black model, the weight of each analysed security in the portfolio should be proportional to its ________.

• A)alpha/beta
• B)alpha/residual variance
• C)beta/residual variance
• D)none of the above

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Definitions:

Española

A term that can refer to a female of Spanish descent or, geographically, to the island of Hispaniola in the Caribbean, shared by Haiti and the Dominican Republic.

Spanish Explorers

Adventurers from Spain who traveled to the Americas and other parts of the world in the 15th to 17th centuries, claiming territories and spreading Christianity.

Caribbean Islands

A diverse group of islands in the Caribbean Sea, known for their distinct cultures, languages, histories, and natural beauty, playing a crucial role in the Americas' history.

Protestant Revolution

Refers to the period of religious reform in the 16th century that led to the creation of Protestant Christianity, breaking away from the Roman Catholic Church.