In the Treynor-Black Model,the Weight of Each Analyzed Security in the Portfolio

question 51

Multiple Choice

In the Treynor-Black model,the weight of each analyzed security in the portfolio should be proportional to its __________.

• A) alpha/beta
• B) alpha/residual variance
• C) beta/residual variance
• D) none of the above

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Definitions:

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The difference between the selling price per unit and the variable cost per unit.

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A hand tool used for stripping the insulation from electric wires, essential in electrical wiring tasks.

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An entity engaged in the business of producing goods for sale, using labor, machinery, and raw materials.

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