Three factors likely to occur in the APT model are:
A)unemployment, inﬂation, and current rates.
B)inﬂation, GNP, and interest rates.
C)current rates, inﬂation and change in housing prices.
D)unemployment, college tuition, and GNP.
E)This cannot be determined or even estimated.

Question

Quizplus · Accepted Answer

The Arbitrage Pricing Theory (APT) model is a multifactor asset pricing model that suggests that the returns on an asset can be predicted by the relationship between the asset's expected return and a set of macroeconomic factors. Inflation, Gross National Product (GNP), and interest rates are common examples of such factors because they have a significant impact on the financial markets and can influence the returns on various assets.

Three Factors Likely to Occur in the APT Model Are