Given a Portfolio of 50 Shares,how Many Variance and Unique

question 1

Multiple Choice

Given a portfolio of 50 shares,how many variance and unique covariance terms can be estimated using the Markowitz approach?

• A) 50 variances; 1225 covariances
• B) 50 variances; 1250 covariances
• C) 49 variances; 1200 covariances
• D) 49 variances; 780 covariances

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Definitions:

Random Sample

A subset of a statistical population in which each member has an equal chance of being chosen for analysis or observation.

University Committee

A group of faculty members and sometimes students who come together to make decisions or manage certain aspects of university governance.

Standard Deviation

Standard Deviation is a statistic that measures the dispersion of a dataset relative to its mean, indicating how spread out the data points are.

Probability

A measure of the likelihood or chance that a particular event will occur, expressed as a number between 0 and 1.