The APT Requires a Benchmark Portfolio

question 21

Multiple Choice

The APT requires a benchmark portfolio

• A)that is equal to the true market portfolio.
• B)that contains all securities in proportion to their market values.
• C)that need not be well-diversified.
• D)that is well-diversified and lies on the SML.

---

Definitions:

Individuality

The unique qualities and characteristics that distinguish one person from others, highlighting the importance of personal identity.

Self-Identity

Self-Identity refers to an individual's perception of themselves, including their beliefs, characteristics, and how they relate to the world.

Psychological Balance

The state of mental and emotional stability where an individual feels grounded and centered.