Question

Question 9 Unsaved For portfolio analysis purposes, ex post returns and standard deviations are commonly used even though a primary interest is in the ex ante data. Question 9 options:

a) True

b) False

Answer 1

Answer : true

Rephrasing the question to make it simpler- do we use historical data of mean and standard deviation for future return and related calculations?

Yes. Parametric calculations make use of available mean and sd as a measure of calculation future. We assume that past is the available and relatable measure for future calculations. Unexpected things might happen that will completely alter future values. Simulations, stress testing etc are available to predict future values which are some notches high and lower than historical data. Again the historical data acts as a bench mark for calculations.

Hence an absolute true for this answer