In order to deal with the computational difficulties and complexities of the Markowitz full covariance model, William Sharper developed:
A) the Arbitrage Pricing Theory.
B) the Single Index Model.
C) the Dividend Discount Model.
D) the Binomial Option Pricing Model.

Question

Quizplus · Accepted Answer

William Sharpe developed the Single Index Model as a simpler alternative to the Markowitz full covariance model, aiming to reduce the computational difficulties and complexities associated with portfolio optimization.

In Order to Deal with the Computational Difficulties and Complexities