In creating the T² measure one mixes P* and T-bills to match the _____ of the market and in creating the M² measure one mixes P* and T-bills to match the _____ of the market. A) alpha; beta B) beta; alpha C) beta; standard deviation D) standard deviation; beta

Question

Quizplus · Accepted Answer

The T² measure is designed to match the beta of the market, so the first blank should be filled with "beta." Similarly, the M² measure is designed to match the standard deviation of the market, so the second blank should be filled with "standard deviation." Therefore, the correct answer is C, "beta; standard deviation."

In Creating the T2 Measure One Mixes P* and T-Bills

In Creating the T² Measure One Mixes P* and T-Bills