To implement the single-index model,estimates of the _______for each stock are needed.
A)expected return
B)standard deviation
C)beta
D)covariance

Question

Quizplus · Accepted Answer

In single-index model, the expected return and standard deviation for each stock can be calculated once the beta for each stock is estimated. Therefore, the only estimate required to implement the single-index model is the beta coefficient for each stock. Hence, choice C) is the best option.

To Implement the Single-Index Model,estimates of the _______For Each Stock