Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. 12. compare the markowitz model of security select

12. Compare the Markowitz Model of security selection to the Single Index Model. (a) (4...

90.2K

Verified Solution

Question

Accounting

image

12. Compare the Markowitz Model of security selection to the Single Index Model. (a) (4 points) If there are n securities we can use to construct a portfolio, how many different estimates to we need to construct the Input List in each model? Describe what estimates go into the construction of the input list in each model, and how many of each are needed. (b) (4 points) If there are only three risky securities in the universe of possible investments, in addition to the market index, the Markowitz model actually requires the calculation of fewer estimates than the Single Index Model. Is there any reason for a financial analyst to use the Single Index Model in this scenario? Why or why not? (c) (4 points) If there are only two risky securities in the universe of possible investments, in addition to the market index, is there any reason for a financial analyst to use the Single Index Model? Why or why not

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students