Consider a Single Factor APT

question 11

Multiple Choice

Consider a single factor APT.Portfolio A has a beta of 2.0 and an expected return of 22%.Portfolio B has a beta of 1.5 and an expected return of 17%.The risk-free rate of return is 4%.If you wanted to take advantage of an arbitrage opportunity, you should take a short position in portfolio __________ and a long position in portfolio _______.

• A)A; A
• B)A; B
• C)B; A
• D)B; B

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Definitions:

Organizational Goals

The objectives or targets that an organization endeavors to achieve, which guide its operational and strategic planning.

Employee Engagement

The level of an employee's commitment, involvement, and satisfaction with their work and company.

Workplace Setting

The physical and social environment of a place of employment, including its culture, practices, and conditions.

Opportunities

Situations or conditions that present possibilities for progress, achievement, or advantage.