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

question 38

Multiple Choice

Assume that stock market returns do not resemble a single-index structure. An investment fund analyzes 150 stocks in order to construct a mean-variance efficient portfolio constrained by 150 investments. They will need to calculate _____________ expected returns and ___________ variances of returns.

• A) 150; 150
• B) 150; 22500
• C) 22500; 150
• D) 22500; 22500

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Definitions:

Hierarchy of Values

A ranked system of personal or societal principles and beliefs determining what is most important to an individual or community.

Preferences Differ

Preferences differ highlights the individual variations in choices, likes, or dislikes among people based on their personal experiences, values, or cultural backgrounds.

Values

Fundamental beliefs or ideals that guide an individual's behavior and decision-making within both personal and professional contexts.

Schwartz's Model

A theoretical model proposing a universal structure of human values, identifying ten broad values that guide behavior across cultures.