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.

---

Definitions:

Socialized

Process by which individuals learn and adopt the norms, values, and behaviors appropriate to their society.

Gender Roles

The social and behavioral norms prescribed for individuals based on their perceived or actual gender in a given society.

Glans Penis

The head of the penile shaft.

Sexual Arousal

The physiological and psychological state of being stimulated or excited sexually, leading to physical and emotional responses.