Which of the following would be required for tests of the multifactor CAPM and APT?

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All of these requirements are necessary for tests of both the multifactor CAPM and the APT. The specification of risk factors involves identifying the variables that affect asset returns. The identification of portfolios that hedge these fundamental risk factors involves constructing a set of portfolios that behave differently in response to these variables. Tests of the explanatory power and risk premiums of the hedge portfolios involve analyzing whether or not the model can explain the variation in asset returns and the associated risk premiums.

Which of the Following Would Be Required for Tests of the Multifactor