Consider the One-Factor APT

question 56

Multiple Choice

Consider the one-factor APT. The variance of returns on the factor portfolio is 9. The beta of a well-diversified portfolio on the factor is 1.25. The variance of returns on the well-diversified portfolio is approximately

• A) 3.6.
• B) 6.0.
• C) 7.3.
• D) 14.1.

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Definitions:

Stanford-Binet Intelligence Scales

A standardized test designed to assess intelligence and cognitive abilities, originally developed as an instrument for measuring IQ in children and adults.

Kaufman Assessment Battery for Children

A standardized test that measures cognitive development and problem-solving abilities in children between the ages of 2.5 and 12.5 years.

Terman Intelligence Test/Education Edition

A standardized test designed to measure human intelligence and cognitive abilities, adapted for educational settings by Lewis Terman.

Intelligence Quotient

A score that takes into account a student’s mental and chronological age.