Different investors estimate the inputs to the Markowitz model differently because:
A) investors have their own risk/return preferences.
B) every investor has access to different information about securities.
C) there is an inherent uncertainty in security analysis.
D) there is a random selection process used by individual investors.

Question

Quizplus · Accepted Answer

There is inherent uncertainty in security analysis, leading to different estimates of inputs like expected returns, variances, and covariances in the Markowitz model.

Different Investors Estimate the Inputs to the Markowitz Model Differently