Answer:
The right approach is Option C (global minimum variance portfolio).
Explanation:
- A completely-invested portfolio with either a low uncertainty factor seems to be the GMV portfolio. This same GMV portfolio corresponds to or is situated mostly on the left end including its FI-efficient frontier.
- Although aside from either the full-investment requirement, no restrictions are enforced, the GMV portfolio deals for analytical portrayal.
The latter options offered are not relevant to something like the scenario presented. So that is indeed the correct solution.
Answer:
Lucky event
Explanation:
In the investments market a true measure of market efficiency is to get a track record of positive outcome from investors over time.
The lucky event problem occurs when an investor makes a profit on investment not because of how efficient a market is or by a logical procedure, but rather by chance.
In the given scenario Keyes put all his money in one stock that doubled in 3 months.
However this was not replicated among other investors who made similar vets on other stocks and lost.
This is an exams of lucky event problem in determining market efficiency.