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.

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Definitions:

Pollution Emission Permits

Licenses or allowances issued by governments that grant the holder the right to emit a specific quantity of pollutants into the environment.

Equilibrium Price

The price at which the quantity of a product offered is equal to the quantity of the product in demand.

Record-Keeping System

A method or system used for creating, maintaining, and managing records or documents for efficient and systematic storage and retrieval.

Job-Search Activities

Actions undertaken by individuals seeking employment, including networking, applying for jobs, attending interviews, and participating in job fairs.