Q. Alpha forecasts must be ____________ to account for less-than-perfect forecasting quality. When alpha forecasts are ____________ to account for forecast imprecision, the resulting portfolio position becomes ____________. (Solved)

1. shrunk, shrunk, far less moderate

2. shrunk, shrunk, far more moderate

3. grossed up, grossed up, far less moderate

4. grossed up, grossed up, far more moderate

  • b. shrunk, shrunk, far more moderate
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