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:

Control

In experimental research, the practice of limiting the influence of confounding variables to determine the effect of the independent variable on the dependent variable more accurately.

Negative Reinforcement

A concept in behaviorism where the removal of an unpleasant stimulus strengthens a behavior.

Positive Reinforcement

A process in behavior analysis where a favorable outcome, event, or reward occurs after an action, thereby increasing the likelihood of that action being repeated in the future.

Negative Punishment

A behavior modification technique where reducing or removing a desirable stimulus follows an unwanted behavior to decrease its occurrence.