Questions
BU.232.750.81.FA25 Final Exam Fall 2025- Requires Respondus LockDown Browser
Single choice
Which statement is (are) false about resampled efficient frontier?
Options
A.E. B and C.
B.D. A and B.
C.A. EF more stable than traditional MV.
D.F. All statements above.
E.C. There is a theoretical support that a portfolio constructed through resampling should provide superior performance relative to another portfolio constructed through traditional mean variance analysis.
F.B. Portfolios tend to be better diversiï¬ ed than s traditional MV.
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Step-by-Step Analysis
Here is a structured analysis of each option regarding the false statements about the resampled efficient frontier.
Option A: 'EF more stable than traditional MV.'
- Think about what resampling does: by repeatedly sampling from the data and re-estimating the frontier, the resulting efficient frontier tends to smooth out estimation error and produce portfolios that are less sensitive to any single sample peculiarities. This generally leads to greater stability in the sense that the resulting EF portfolios don’t swing as wildly with small data changes. However, note that 'more stable' is not guaranteed in all contexts; it is a typical outcome......Login to view full explanationLog in for full answers
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