Assume That Stock Market Returns Do Not Resemble a Single-Index

question 1

Multiple Choice

Assume that stock market returns do not resemble a single-index structure.An investment fund analyzes 40 stocks in order to construct a mean-variance efficient portfolio constrained by 40 investments.They will need to calculate _____________ expected returns and ___________ variances of returns.

• A)100, 100
• B)40, 40
• C)4950, 100
• D)4950, 4950
• E)none of the above

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Definitions:

Arousal

A physiological and psychological state of being awake or reactive to stimuli.

Context

The circumstances or setting surrounding an event, statement, or idea which can significantly affect its meaning or interpretation.

Intrinsic Motivation

Intrinsic motivation is driven by an interest or enjoyment in the task itself, without external reward or pressure.

Extrinsic Motivation

The drive to perform activities due to external rewards or pressures rather than for intrinsic satisfaction.