While sample means are very unreliable estimates of expected asset returns, sample variances, standard deviations, and
correlations are much more reliable because:
Select one
A. The true values of these risk characteristics do not change over time.
B. Using higher frequency data improves the precision of these estimates.
C. Estimation errors for these risk characteristics tend to cancel out across asset classes.
D. Accuracy of these measures is enforced by trading in options.