Which of the following economic factors have been identified to explain security returns according to the APT?
A) Unanticipated changes in industrial production.
B) Unanticipated changes in inflation.
C) Unanticipated changes in interest rates.
D) Unanticipated changes in the shape of the yield curve.
E) All of the above.

Question

Quizplus · Accepted Answer

The Arbitrage Pricing Theory (APT) posits that multiple economic factors, including unanticipated changes in industrial production, inflation, interest rates, and the shape of the yield curve, can explain security returns. These factors are considered because they can significantly impact the financial markets and the performance of investments.

Which of the Following Economic Factors Have Been Identified to Explain