Answer:

The single-index model

a. greatly reduces the number of required calculations relative to those required by the Markowitz model and enhances the understanding of systematic versus non-systematic risk.

The single-index model is a simple asset pricing model to measure both the risk and the return of a stock.

According to this model, the return of any stock can be decomposed into the expected excess return of the individual stock due to firm-specific factors, commonly denoted by its alpha coefficient (α), the return due to macroeconomic events that affect the market, and the unexpected microeconomic events that affect only the firm.