Which of the Following Statements Is/are True

question 45

Multiple Choice

Which of the following statements is/are true?

• A)Both APT and CAPM argue that expected excess return must be proportional to the
• Beta(s).
• B)APT and CAPM are the only approaches to measure expected returns in risky assets.
• C)Both CAPM and APT are risk-based models.
• D)Both A and B are true.
• E)Both A and C are true.

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Definitions:

Par Value

The face value of a bond or a stock as stated by the issuing company, which may not reflect the current market value.

Paid-in Capital

The total amount of cash and other assets that shareholders have contributed to the company in exchange for shares.

Dividends

A portion of a company's earnings that is distributed to shareholders.