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Arbitrage Pricing Theory Is Based on the Premise That More

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True/False

Arbitrage pricing theory is based on the premise that more than one factor affects stock returns, and the factors are specified to be (1) market returns, (2) dividend yields, and (3) changes in inflation.


Definitions:

Retirement Savings Plan

A retirement savings plan is a financial arrangement designed to replace employment income upon retirement, which can include various types of accounts like 401(k)s and IRAs.

Tax-exempt Saving

An investment account or product that offers tax benefits, such as no taxation on the interest or profits earned.

529 Plan

A tax-advantaged savings plan designed to encourage saving for future education costs, including tuition, fees, and room and board.

Annual Return

The percentage change in an investment's value over a one-year period, taking into account both capital gains and dividend or interest earnings.

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