In a factor model,the return on a stock in a particular period will be related to
A)factor risk.
B)non-factor risk.
C)standard deviation of returns.
D)both A and B are true.
E)none of the above are true.

Question

Quizplus · Accepted Answer

In a factor model, the return on a stock is influenced by both factor risk (systematic risk related to common factors) and non-factor risk (idiosyncratic or specific risk unique to the stock).

In a Factor Model,the Return on a Stock in a Particular