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1. Consider an environment of 20 individual risky securities and one risk-free asset. One investor is selecting between the Markowitz mean-variance frontier framework and the

1. Consider an environment of 20 individual risky securities and one risk-free asset. One investor is selecting between the Markowitz mean-variance frontier framework and the index model in the portfolio analysis. Answer the following questions:

(a) How many parameters are used as the input to construct the mean-variance frontier?

(b) How many inputs are used for the index model?

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