Use the Formula for the General Term (The Nth Term) $$\text { Find } a _ { 4 } \text { when } a _ { 1 } = 2 , r = 5 \text {. }$$

question 96

Multiple Choice

Use the formula for the general term (the nth term) of a geometric sequence to find the indicated term of the sequence with the given first term, a1, and common ratio, r.
- $$\text { Find } a _ { 4 } \text { when } a _ { 1 } = 2 , r = 5 \text {. }$$

• A) 30
• B) 1250
• C) 125
• D) 250

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Definitions:

Multifactor APT

A model in financial markets that describes how the returns of an asset can be determined by its exposure to multiple risk factors, as per the Arbitrage Pricing Theory.

Risk Premiums

The additional return expected by an investor for taking on a higher risk compared to a risk-free investment.

No Arbitrage

A principle stating that it is impossible to achieve risk-free profits from inconsistent or mispriced asset prices in efficient markets, as arbitrage opportunities are quickly exploited and corrected.

Risk Premium

The extra return over the risk-free rate that investors require to compensate them for the risk of holding a risky asset.