Assume a one factor model for a security's return is 10% - 1.5 (CPI). For the year, the CPI's growth rate was 5%, and security's actual return was 8%. The security's unique return was
A) 2.5%.
B) -2.5%.
C) 8%.
D) 5.5%.

Question

Quizplus · Accepted Answer

The Answer of Assume a one factor model for a security's return is 10% - 1.5 (CPI). For the year, the CPI's growth rate was 5%, and security's actual return was 8%. The security's unique return was
A) 2.5%.
B) -2.5%.
C) 8%.
D) 5.5%.

Assume a One Factor Model for a Security's Return Is