Assume That Stock Market Returns Do Follow a Single-Index Structure

question 7

Multiple Choice

Assume that stock market returns do follow a single-index structure.An investment fund analyzes 217 stocks in order to construct a mean-variance efficient portfolio constrained by 217 investments.They will need to calculate ________ estimates of expected returns and ________ estimates of sensitivity coefficients to the macroeconomic factor.

• A)217; 47,089
• B)217; 217
• C)47,089; 217
• D)47,089; 47,089
• E)none of the above

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Definitions:

Limbic System

A complex system of nerves and networks in the brain, involved in the control of basic emotions and drives, such as fear, pleasure, and anger.

Thalamus

Structure of the brain that directs incoming information from sense receptors (such as vision and hearing) to the cerebrum.

Psychological Approach

Approach to abnormality that focuses on personality, behavior, and ways of thinking as possible causes of abnormality.

Abnormal Behavior

Actions, thoughts, or feelings that are significantly deviant from cultural norms or expectations.