To determine whether portfolio performance is statistically significant requires
A)a very long observation period due to the high variance of stock returns.
B)a short observation period due to the high variance of stock returns.
C)a very long observation period due to the low variance of stock returns.
D)a short observation period due to the low variance of stock returns.

Question

Quizplus · Accepted Answer

A long observation period is required to determine statistical significance because stock returns have a high variance, meaning that there is a large amount of uncertainty in the data. A longer observation period helps to reduce this uncertainty and provide a more accurate assessment of portfolio performance.

To Determine Whether Portfolio Performance Is Statistically Significant Requires