In the APT Model, What Is the Nonsystematic Standard Deviation $\sigma$

question 27

Multiple Choice

In the APT model, what is the nonsystematic standard deviation of an equally-weighted portfolio that has an average value of $\sigma$ (e_i) equal to 18% and 250 securities?

• A)1.14%
• B)625%
• C)0.5%
• D)3.54%

Comprehend and apply straight-line depreciation in the calculation of net income and project returns.

Evaluate investment decisions using different financial metrics and make informed choices.

Understand the concepts of mass customization and process improvement strategies.

Identify ethical and environmentally friendly process strategies.

---

Definitions:

Experimental Group

The group in an experiment that receives the treatment or condition being tested, as opposed to the control group which does not.

Random Assignment

A method used in experiments to distribute participants randomly across different groups to ensure unbiased results.

Demand Characteristics

Implicit cues in an experiment that influence the participants' behavior towards a particular outcome.

Random Assignment

A method used in experiments to divide individuals into groups in a way that every participant has an equal chance of being assigned to any group, helping to ensure that the groups are comparable.