The Arbitrage Pricing Theory (Or APT) Model Postulates That a Security's

question 17

True/False

The arbitrage pricing theory (or APT) model postulates that a security's return is a function of several factors and the security's sensitivity to changes in each of them.

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Definitions:

Independent Variable

A variable that is manipulated or changed in an experiment to observe its effect on a dependent variable.

Outcome Variable

Another term for the dependent variable, specifically referring to the result or effect measured in a study.

Factorial Analysis

A statistical method used to describe variability among observed variables in terms of a potentially lower number of unobserved variables called factors.

Source Table

A detailed table used in reporting research or statistical results, which sources data or information.