Whereas Computers Use the Base 2 System, People Are Used

question 5

Short Answer

Whereas computers use the Base 2 system, people are used to using the Base ________ system.

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Definitions:

Multifactor APT

Multifactor APT, or Arbitrage Pricing Theory, is a model that describes the expected return on a financial asset as a linear function of various macroeconomic factors or theoretical market indexes.

Macro Factors

Economic variables that affect a wide range of assets and securities including inflation, interest rates, economic growth, and political stability.

Factor Portfolio

A portfolio constructed to have a high sensitivity to a specific factor or factors, used to capture returns associated with those factors.

Well-Diversified

A portfolio strategy involving the mix of different investments to reduce exposure to risk.