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

question 61

Multiple Choice

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 ____________ covariances.

• A)45
• B)100
• C)4,950
• D)10,000
• E)none of the above

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Definitions:

Test-retest Reliability

The consistency of a measure assessed by testing the same individuals at two different points in time.

Item-total Correlation

The statistical relationship between a single test item and the total score on the test, used to assess the item's quality.

Consistency

in research refers to the reliability or stability of measurements over time, across different contexts, or when using various methods of assessment.

Construct Validity

The degree to which a test or instrument accurately measures the theoretical construct or trait it is intended to measure.