Different Investors Will Estimate the Inputs to the Markowitz Model

question 3

Multiple Choice

Different investors will estimate the inputs to the Markowitz model differently because:

• A)every investor has his/her own risk/return preferences
• B)every investor has access to different information about securities
• C)there is an inherent uncertainty in security analysis
• D)there is a random selection process used by individual investors

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Definitions:

Agoraphobia

An anxiety disorder characterized by the intense fear of places or situations where escape might be difficult or help may not be available.

Panic Attack

An abrupt onset of intense fear or discomfort, marked by physical and psychological symptoms like rapid heartbeat and feelings of unreality or detachment.

Hyperventilate

To breathe more rapidly and deeply than is necessary for normal levels of oxygen, which can result in dizziness, light-headedness, or fainting.

Anxiety

An emotion of stress and anxiety caused by an event whose result is not yet known.