A "Factor" in APT Is a Variable That

question 57

Multiple Choice

A "factor" in APT is a variable that:

• A) is pure "noise"
• B) correlates with risky asset returns in an unsystematic manner
• C) affects the return of risky assets in a systematic manner
• D) affects the return of a risky asset in a random manner

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Definitions:

Trade Secret

Confidential information that gives a business competitive advantage.

Non-Disclosure Agreement

A legal contract creating a confidential relationship, obligating parties not to disclose sensitive information revealed during a certain activity.

Disclosure

The act of making information known or revealed, often required by law in various legal and financial transactions.

Harm

Damage or injury that negatively affects someone or something.