Financial Models Used to Describe Returns Are Based Either on a Theoretical

question 14

Multiple Choice

Financial models used to describe returns are based either on a theoretical construct or parametric methods. Parametric models rely on:

• A) security betas explaining systematic factor relationships.
• B) finding regularities and relations in past market data.
• C) there being no true explanations of pricing relationships.
• D) always being able to find the exception to the rule.

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Definitions:

Imports

Goods and services bought by a country from another country, contributing to international trade.

Exports

Goods or services provided by one country to another in exchange for foreign currency, contributing to a country's economic health.

Absolute Advantage

The ability of an individual, company, or country to produce a good or service at a lower cost per unit than the cost at which any other entity produces that good or service.

Exchange Rate

The price of one currency in terms of another currency for conversion purposes.