Unlike the Capital Asset Pricing Model,the Arbitrage Pricing Theory Requires

question 7

Multiple Choice

Unlike the capital asset pricing model,the arbitrage pricing theory requires only the following assumption(s) :

• A) A quadratric utility function.
• B) Normally distributed returns.
• C) The stochastic process generating asset returns can be represented by a factor model.
• D) A mean-variance efficient market portfolio consisting of all risky assets.
• E) All of the above

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Definitions:

Great Britain

A country located off the northwestern coast of mainland Europe comprising England, Scotland, Wales, and Northern Ireland, known for its influential role in global politics, economics, and culture.

Economic Interests

Concerns or investments that involve the financial well-being of individuals, groups, or nations, including trade, resources, and markets.

Expansionist Foreign Policy

A strategy by a country to increase its power and territory through acquisition or diplomatic efforts.

Late Nineteenth Century

The period from 1871 to 1900, marked by significant industrial, social, and political changes worldwide, including the Second Industrial Revolution and the height of the British Empire.