In the One Factor (APT) Model, the Characteristic Line to Estimate

question 15

Multiple Choice

In the One Factor (APT) Model, the characteristic line to estimate $\beta$ i passes through the origin, unlike the estimate used in the CAPM because:

• A) the relationship is between the actual return on a security and the market index.
• B) the relationship measures the change in the security return over time versus the change in the market return.
• C) the relationship measures the change in excess return on a security versus GNP.
• D) the relationship measures the change in excess return on a security versus the change in the factor about its mean of zero.

Identify and understand the steps of the decision-making process.

Differentiate between various decision-making models.

Understand criteria for evaluating decision alternatives.

Understand the concept of a learning organization and its characteristics.

---

Definitions:

Cerebral Cortex

The outer layer of the brain involved in various higher brain functions such as sensation, voluntary muscle movement, thought, reasoning, and memory.

Voluntary Muscle Movement

Muscle movements that are under conscious control, involving skeletal muscles and used in performing deliberate actions.

Aphasia

A disorder characterized by the loss of the ability to understand or express speech, caused by brain damage.

Car Accident

A collision involving one or more automobiles, potentially resulting in damage to the vehicles and injury or fatality to the individuals involved.