Consider a Single Factor APT

question 76

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
• E) A; the riskless asset

Identify key considerations and preparation tips for phone and virtual interviews.

Understand the impact of first impressions and professional behavior during interviews.

Comprehend the reasons for and effective use of resignation and thank-you messages.

Understand the role and structure of behavioral questions in interviews.

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Definitions:

Mode

The value that appears most frequently in a given set of data.

National Counseling Exam

A standardized examination for credentialing counselors in the United States, assessing knowledge and competency in the field.

Frequency Distribution

A method of understanding test scores by ordering a set of scores from high to low and listing the corresponding frequency of each score across from it.

Histogram

A method of converting a frequency distribution of scores into a bar graph. After combining scores by class interval, the class intervals are placed along the x-axis and the frequency of scores along the y-axis.