To determine whether portfolio performance is statistically significant requires
A) a very long observation period due to the high variance of stock returns.
B) a short observation period due to the high variance of stock returns.
C) a very long observation period due to the low variance of stock returns.
D) a short observation period due to the low variance of stock returns.
E) a low variance of returns over any observation period.

Question

Quizplus · Accepted Answer

A very long observation period is required due to the high variance of stock returns. This allows for a more accurate assessment of the portfolio's performance by averaging out the fluctuations over time.

To Determine Whether Portfolio Performance Is Statistically Significant Requires