Assuming That the Single Factor APT Model Applies, the Beta

question 18

Multiple Choice

Assuming that the single factor APT model applies, the beta for the market portfolio is:

• A) zero.
• B) one.
• C) the average of the risk free beta and the beta for the highest risk security.
• D) impossible to calculate without collecting sample data.

---

Definitions:

Organic Reaction

A chemical reaction involving organic compounds, where covalent bonds between carbon atoms are made or broken in the presence of other atoms.

Organic Reaction

A chemical reaction involving organic compounds, where these compounds are typically based on carbon.

Diels-Alder Reactions

A chemical reaction between a conjugated diene and a dienophile to form a cyclohexene derivative.

Cyclopentadiene

A cyclical diolefin molecule known for its unique reactivity, utilized in Diels-Alder reactions, and producing polymers and resins.