Which of the Following Is a Method That May Overcome

question 108

Multiple Choice

Which of the following is a method that may overcome weaknesses in the historic or back simulation model?

• A)The use of smaller sample sizes to estimate return distributions.
• B)Weight sample size observations so that the more recent observations contribute a larger amount to the model.
• C)Decrease the number of assets in the trading portfolio so that past returns will provide more accuracy to the model.
• D)Increase the number of assets in the trading portfolio in order to benefit from higher levels of diversification.
• E)The weaknesses in the model cannot be overcome.

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Definitions:

Copper Mining

The process of extracting copper from the earth, involving digging, blasting, and processing the ore.

Low-Grade Ores

Minerals containing a smaller percentage of valuable metals or minerals, thus requiring more resources to extract them profitably.

Depletion Time

The estimated time it will take to use up a resource at its current rate of consumption.

Mineral Reserves

Quantities of minerals that can be profitably extracted and processed with current technology.