Tests of Multifactor Models Indicate

question 8

Multiple Choice

Tests of multifactor models indicate

• A) the single-factor model has better explanatory power in estimating security returns.
• B) macroeconomic variables have no explanatory power in estimating security returns.
• C) it may be possible to hedge some economic factors that affect future-consumption risk with appropriate portfolios.
• D) multifactor models do not work.
• E) None of the options are correct.

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