A ____________ process is a statistical model that describes how the return on a security is produced.
A) factor-indexing
B) price-generating
C) return-generating
D) return-to-mean

Question

Quizplus · Accepted Answer

A return-generating process is a statistical model used to describe how the return on a security or a portfolio of securities is produced over time. It is used to predict future returns based on past performance and underlying market factors. Factors such as interest rates, inflation, market volatility, and company-specific events can all affect the return-generating process of a security or portfolio. The goal of understanding the return-generating process is to generate higher returns, reduce risk, and achieve better long-term investment results.

A ____________ Process Is a Statistical Model That Describes How