麻烦解读一下答案？

问题如下：

Yuen and Ruckey design a Benchmark Portfolio (A) and a Risk Parity Portfolio (B), and then run two simulation methods (the historical simulation and Monte Carlo simulation) to generate investment performance data based on the underlying nine factor portfolios.

Yuen and Ruckey discuss the differences between the two simulation methods. During the process, Yuen expresses a number of concerns:

• Concern 2: The number of simulations needed for historical simulation is larger than the size of the historical dataset.

To address Concern 2 when designing Historical simulation, Yuen should:

选项：

add monthly return observations to the dataset using interpolation.

randomly sample from the historical returns with replacement.

choose the multivariate normal distribution as the initial functional form.

解释：

B is correct. Random sampling with replacement, also known as bootstrapping, is often used in historical simulations because the number of simulations needed is often larger than the size of the historical dataset. Because Concern 2 notes that the number of simulations needed is larger than the size of the historical dataset, bootstrapping should be used.

A is incorrect because this approach would result in creating observations that do not exist in the historical record. Doing so would violate the assumption and procedures of historical simulation.

C is incorrect because choosing the multivariate normal distribution as the initial functional form is typically done in a Monte Carlo simulation, not in a historical simulation. Historical simulation randomly samples from the historical dataset by drawing a number from a uniform distribution so that there is equal probability of being selected. Choice of distribution would not address the concern about the size of the dataset.