If the index model is valid,_________ would be helpful in determining the covariance between assets K and L. A) β_k B) β_L C) σ_M D) all of these E) none of these

Question

Quizplus · Accepted Answer

The covariance between assets K and L in the index model can be determined using the formula: Cov(K, L) = β_K * β_L * σ_M². Therefore, all of these parameters are needed.

If the Index Model Is Valid,_________ Would Be Helpful in Determining