The market model can be shown to be a specific example of a ____- factor model.
A) binomial
B) one
C) indexed
D) market

Question

Quizplus · Accepted Answer

The market model is a one-factor model because it only considers the overall market as a factor that affects stock returns. Other factor models may consider multiple factors, such as interest rates, inflation, and company-specific variables. Therefore, the best choice is B - one.

The Market Model Can Be Shown to Be a Specific