The answer to the previous question is –
A. The minimum variance portfolio is a portfolio of securities which has the lowest standard deviation of each of the individual component assets
Here, is the Question of the Day –
An investor makes the following statement,
While testing the weak-form of EMH the returns from a trading rule must be calculated excluding any transaction charges because they tend to skew the returns when the returns are negative.
- Transaction costs increase the losses when the returns are negative.
- Transaction costs involved in implementing the trading rule should be included.
- Transaction costs are public information and they should be included in the calculations..