The Problem with Relying on a Point Estimate of a Population

question 91

Multiple Choice

The problem with relying on a point estimate of a population parameter is that:

• A)it is virtually certain to be wrong.
• B)it doesn't have the capacity to reflect the effects of larger sample sizes.
• C)it doesn't tell us how close or far the point estimate might be from the parameter.
• D)All of these choices are true.

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Definitions:

Portfolio Variance

A measure of the dispersion of returns of a portfolio, representing the risk inherent in holding a portfolio of multiple assets.

Cyclical Stock

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Countercyclical Stock

A stock whose performance is inversely related to the economy's performance, often doing well during economic downturns.

U.S. Treasury Bills

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