A)) If investors have quadratic utility functions, they will exhibit ____________ absolute risk aversion and __________ relative risk aversion.

A. Increasing; Decreasing

B. Increasing; Increasing

C. none of the answers listed here.

D. Decreasing; Increasing

B)) The benefit of using a single index model versus the full covariance Markowitz model to construct the efficient frontier is _____________, the cost is ________________.

better forecasting; loss of predictability

none of the answers listed here

reduction in the number of inputs; accuracy

ease of computation; better forecasting