Consider the One-Factor APT

question 23

Multiple Choice

Consider the one-factor APT. The standard deviation of returns on a well-diversified portfolio is 19%. The standard deviation on the factor portfolio is 12%. The beta of the well-diversified portfolio is approximately

• A) 1.58.
• B) 1.13.
• C) 1.25.
• D) 0.76.

---

Definitions:

General Paresis

An irreversible medical disorder whose symptoms include psychological abnormalities, such as delusions of grandeur; caused by syphilis.

Emil Kraepelin

A German psychiatrist known for his contributions to the classification of mental disorders and is often considered the founder of modern scientific psychiatry.

Syphilis

A sexually transmitted infection caused by the bacterium Treponema pallidum, characterized by distinct stages and symptoms, including sores, rashes, and potentially serious late-stage complications.

AIDS

Acquired Immunodeficiency Syndrome is a severe, possibly fatal disease caused by the human immunodeficiency virus (HIV) that impairs the immune system.