To Develop the Set of Efficient Portfolios, the One-Factor Model

question 13

Multiple Choice

To develop the set of efficient portfolios, the one-factor model does not require the estimation of direct covariances between each security. Instead, it requires the estimate of the

• A) variance for each security.
• B) value of the factor.
• C) riskfree return.
• D) expected return for each security.

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