Examlex
Which statement is correct?
Single-index Model
A model of stock returns that decomposes influences on returns into a systematic factor, as measured by the return on a broad market index, and firm-specific factors.
Systematic Component
The part of an investment’s return or risk that is attributable to broad market factors affecting all investments to some degree.
Single Factor Model
A financial model that describes the return on a security as a function of a single factor, typically the market return, plus security-specific variations.
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