Multifactor Models of Risk and Return Can Be Broadly Grouped

question 140

True/False

Multifactor models of risk and return can be broadly grouped into models that use macroeconomic factors and models that use microeconomic factors.

---

Definitions:

Liability Insurance Policy

A financial product that provides the insured party with protection against claims resulting from injuries and damage to people and/or property.

Insurable Interest

The stake or financial interest an individual or entity has in the potential loss of something insured, ensuring they suffer a direct loss if an insured event occurs.

Good Faith

A sincere intention to deal fairly with others without any intention to deceive or commit fraud.

Coinsurance Clause

A provision in an insurance policy requiring the policyholder to bear a portion of the costs of a claim, reducing the insurer’s risk.