An Explicit,testable Prediction About the Conditions Under Which an Event

question 28

Multiple Choice

An explicit,testable prediction about the conditions under which an event will occur is a(n)

• A)correlation coefficient.
• B)theory.
• C)independent variable.
• D)hypothesis.

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Definitions:

Securities

Financial instruments that represent an ownership position in a publicly-traded corporation (stock), a creditor relationship with a governmental body or a corporation (bond), or rights to ownership as represented by an option.

CAPM

Capital Asset Pricing Model, a formula used to determine the expected return on an investment based on its risk relative to the market.

APT Model

Arbitrage Pricing Theory Model; a financial theory that estimates the returns on assets based on their exposure to various risk factors.

One Factor

In finance, refers to models or analyses that consider only a single variable or risk factor in their calculations.