For a company like Alcoa, what is likely to be the major factor when developing an arbitrage pricing model?
A) Asset price of stocks
B) Commodity price of aluminum
C) GDP
D) Inflation

Question

Quizplus · Accepted Answer

As Alcoa is a company that produces aluminum, the commodity price of aluminum is likely to be the major factor when developing an arbitrage pricing model. The prices of related commodities such as copper and steel may also have an impact. The other options (asset price of stocks, GDP, and inflation) may still be considered in the model, but they would likely be of secondary importance.

For a Company Like Alcoa, What Is Likely to Be