A similarity between APT and CAPM is that both
A) assume security sensitivities are explained by beta.
B) assumes investors want the largest return for a given level of risk.
C) make the same assumption about riskfree lending rates.
D) use the covariance between a security and the market.
Correct Answer:
Verified
Q1: Pure factor portfolios have _ sensitivity to
Q3: When an arbitrage pricing model is in
Q4: _ risk is the portion of a
Q5: The APT approach assumes stock returns are
Q6: Strictly speaking, an arbitrage portfolio should have
Q7: In developing an arbitrage portfolio, the factor
Q8: An arbitrage price model recommends buying more
Q9: Most research results have identified common factors
Q10: In a two-factor model, each security will
Q11: The essential logic of the arbitrage pricing
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