Consider the Following List of Risk Factors: (1)

question 39

Multiple Choice

Consider the following list of risk factors: (1)
Monthly growth in industrial production
(2)
Return on high book to market value portfolio minus return on low book to market value portfolio
(3)
Change in inflation
(4)
Excess return on stock market portfolio
(5)
Return on small cap portfolio minus return on big cap portfolio
(6)
Unanticipated change in bond credit spread
Which of the following factors would you use to develop a microeconomic-based risk factor model?

• A)(1), (2), and (3).
• B)(1), (3), and (5).
• C)(2), (4), and (5).
• D)(1), (3), and (6).
• E)(4), (5), and (6).

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Definitions:

Dissociative Amnesia Disorder

A mental health disorder characterized by an inability to recall important personal information, usually following a stressful or traumatic event, that cannot be explained by ordinary forgetfulness.

Obsessive-Compulsive Disorder

A mental health disorder characterized by repetitive, unwanted thoughts (obsessions) and irrational, excessive urges to do certain actions (compulsions).

Panic Disorder

A type of anxiety disorder characterized by sudden and repeated episodes of intense fear accompanied by physical symptoms such as chest pain, heart palpitations, or shortness of breath.

Representativeness Heuristic

A cognitive bias where people judge the probability of an event by how much it resembles a typical case.