Exhibit 9.1 Use the Information Below for the Following Problem(S)

question 33

Multiple Choice

Exhibit 9.1
Use the Information Below for the Following Problem(S)
(1) Capital markets are perfectly competitive.
(2) Quadratic utility function.
(3) Investors prefer more wealth to less wealth with certainty.
(4) Normally distributed security returns.
(5) Representation as a K factor model.
(6) A market portfolio that is mean-variance efficient.
-Refer to Exhibit 9.1.In the list above,which are not assumptions of the Arbitrage Pricing model?

• A) (1) and (3)
• B) (1), (2), and (3)
• C) (1), (2), and (5)
• D) (2), (4), and (6)
• E) All six are assumptions

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Definitions:

Cognition

The cognitive process of gaining knowledge and comprehension via thinking, experiencing, and sensory perception.

Auditory Hallucination

The perception of sound, such as voices, music, or noises, in the absence of any external auditory stimulus.

Hunger Pang

A sudden, sharp feeling of hunger, often experienced as a physical discomfort in the stomach.

Social Cognition

The study of how people process, store, and apply information about others and social situations; it involves understanding how we think about ourselves and others in the social world.