If the index model is valid,_________ would be helpful in determining the covariance between assets HPQ and KMP. A)β_HPQ B)β_KMP C)β_M D)all of the above E)none of the above

Question

Quizplus · Accepted Answer

The covariance between two assets in the index model can be determined using the betas of the individual assets with respect to the market index. Therefore, β_HPQ, β_KMP, and β_M are all relevant in calculating the covariance.

If the Index Model Is Valid,_________ Would Be Helpful in Determining