Tests of Multifactor Models Indicate

question 6

Multiple Choice

Tests of multifactor models indicate

• A)the single-factor model has better explanatory power in estimating security returns.
• B)macroeconomic variables have no explanatory power in estimating security returns.
• C)it may be possible to hedge some economic factors that affect future-consumption risk with appropriate portfolios.
• D)multifactor models do not work.

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Definitions:

Genetic Causes

Factors related to variations or mutations in genes that can lead to various traits, diseases, or conditions in organisms.

Stickleback

A small fish often used in evolutionary biology studies, notable for its variable spines and the ability to adapt to fresh and salt water.

Elicit

To provoke or draw out a response, answer, or fact from someone in reaction to one's own actions or questions.

Attack Response

A behavioral or physiological reaction by an organism to a perceived threat, often involving defense mechanisms or retaliation.