Consider the Multifactor APT

question 30

Multiple Choice

Consider the multifactor APT.There are two independent economic factors, F₁andF₂.The risk-free rate of return is 6%.The following information is available about two well-diversified portfolios: Assuming no arbitrage opportunities exist, the risk premium on the factorF₂portfolio should be

• A)3%.
• B)4%.
• C)5%.
• D)6%.

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Definitions:

Disable Zone

A safety or control feature in machinery that temporarily disables operation in a specific area or zone for protection or maintenance purposes.

NC Stop Button

A normally closed stop button that interrupts a circuit or process when pressed, ensuring the circuit remains active unless explicitly stopped.

Field Wire

Refers to the electrical cabling and wiring used in the field or on-site installations, typically for connecting sensors, devices, or equipment to control systems.

Input Module

A component in control and automation systems designed to read and process input signals from various sensors or devices.