Please choose the correct option and provide the solution:

1) Assume that stock market returns do not resemble a single-index structure. An investment fund analyzes 150 stocks in order to construct a mean-variance efficient portfolio constrained by 300 investments. They will need to calculate ____________ covariances.

A) 44,850

B) 150

C) 22,500

D) 11,175

2) Assume that stock market returns do follow a single-index structure. An investment fund analyzes 1000 stocks in order to construct a mean-variance efficient portfolio constrained by 500 investments. They will need to calculate ________ estimates of firm-specific variances and ________ estimate/estimates for the variance of the macroeconomic factor.

A) 500; 1 B) 1000; 1 C) 124,750; 1 D) 124,750; 500 E) 250,000; 500