The single factor APT model that resembles the market model uses _____________ as the single factor:
A) arbitrage fees
B) GNP E) the risk-free return
C) the inflation rate
D) the market return

Question

Quizplus · Accepted Answer

The single factor APT model that resembles the market model uses the market return as the single factor. This is because the market return is a good indicator of overall market performance and captures most of the systematic risk in the market.

The Single Factor APT Model That Resembles the Market Model