Use the Equation for the Question(s)below

question 28

Multiple Choice

Use the equation for the question(s) below.Consider the following factor specification:
E[Rs] - rf = (E[RMkt] - rf) + E[RSMB] + E[RHML] + E[RPR1 YR]
-The term measures the sensitivity of the securities' returns to:

• A)momentum.
• B)the overall market.
• C)book-to-market.
• D)size.

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Definitions:

Fallacy

An incorrect belief or mistaken reasoning often based on unsound argument.

Deregulated

Refers to the reduction or elimination of government power in a particular industry, usually to create more competition and increase efficiency.

Post Hoc

Post hoc, short for "post hoc ergo propter hoc," is a logical fallacy that assumes a cause-and-effect relationship simply because one event follows another.

Ergo Propter Hoc

A logical fallacy meaning "therefore, because of this," suggesting a cause-and-effect relationship where none exists.