Suppose you are doing a portfolio analysis that includes all of the stocks on the NYSE.Using a single-index model rather than the Markowitz model
A)increases the number of inputs needed from about 1,400 to more than 1.4 million.
B)increases the number of inputs needed from about 10,000 to more than 125,000.
C)reduces the number of inputs needed from more than 125,000 to about 10,000.
D)reduces the number of inputs needed from more than 4 million to about 9,000.
E)increases the number of inputs needed from about 150 to more than 1,500.

Question

Quizplus · Accepted Answer

This example is discussed in the textbook.The main point for the students to remember is that the single-index model drastically reduces the number of inputs required.

Suppose You Are Doing a Portfolio Analysis That Includes All