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

question 20

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 ____________ covariances.

• A) 12
• B) 150
• C) 22,500
• D) 11,175

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Definitions:

Consumers

People who purchase goods and services for personal use.

Organizations

Entities, either public or private, comprised of people working together towards a common goal, structured in such a way as to enable collective task accomplishment.

Surgeon General

A high-ranking public health official who provides information and advice to the government and the public on health matters.

Sodium

A chemical element with symbol Na and atomic number 11, essential for human health but consumed in excess can lead to health issues.