10-60 Which of the Following Is a Method That May

question 75

Multiple Choice

10-60 Which of the following is a method that may overcome weaknesses in the historic or back simulation model?

• A)The use of smaller sample sizes to estimate return distributions.
• B)Weight sample size observations so that the more recent observations contribute a larger amount to the model.
• C)Decrease the number of assets in the trading portfolio so that past returns will provide more accuracy to the model.
• D)Increase the number of assets in the trading portfolio in order to benefit from higher levels of diversification.
• E)The weaknesses in the model cannot be overcome.

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Definitions:

Bevel Gears

Gears where the axes of the two shafts intersect and the tooth-bearing faces of the gears themselves are conically shaped.

Pitch Cone

In gear design, it is the imaginary cone that represents the underlying angular surface of the teeth, where the pitch surface of an infinitely small gear would be.

Conical Surface

A surface that extends outward and away in all directions from a common point, resembling the shape of a cone.

Frustum

A truncated shape that results from cutting a pyramid or cone with a plane parallel to its base, leaving two bases, one smaller than the other.