The betas along with the factors in the APT adjust the expected return for:
A)calculation errors.
B)unsystematic risks.
C)spurious correlations of factors.
D)differences between actual and expected levels of factors.
E)All of the above.

Question

Quizplus · Accepted Answer

The betas and factors in the APT are used to adjust the expected return for differences between actual and expected levels of factors. The other options listed do not accurately describe the purpose of the APT.

The Betas Along with the Factors in the APT Adjust