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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