Question: Question 1 [ 6 points ] : A portfolio management organization analyzes 1 0 0 stocks and constructs a mean - variance efficient portfolio using

Question 1[6 points]: A portfolio management organization analyzes 100 stocks and constructs a mean-variance
efficient portfolio using only these 100 securities.
a. How many estimates of expected returns, variances, and covariances are needed to optimize this portfolio?
How many in total?
b. If one could safely assume that stock market returns closely resemble a single-index structure, how many
estimates would be needed? What are those estimates?
Question 1[6 points]: A portfolio management organization analyzes 100 stocks and

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