Exhibit 9.1 Use the Information Below for the Following Problem(S)

question 44

Multiple Choice

Exhibit 9.1
Use the Information Below for the Following Problem(S)
(1) Capital markets are perfectly competitive.
(2) Quadratic utility function.
(3) Investors prefer more wealth to less wealth with certainty.
(4) Normally distributed security returns.
(5) Representation as a K factor model.
(6) A market portfolio that is mean-variance efficient.
-Refer to Exhibit 9.1.In the list above which are assumptions of the Arbitrage Pricing Model?

• A) (1) and (4)
• B) (1), (2), and (3)
• C) (1), (3), and (5)
• D) (2), (3), (4), and (6)
• E) All six are assumptions

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Definitions:

Physical Inventory

The process of counting all physical merchandise or stock in a store or warehouse to verify records and ensure accuracy in financial accounting.

Balance Sheet

A balance sheet is a financial statement that provides a snapshot of a company’s financial position, showing its assets, liabilities, and equity at a specific point in time.

Income Statement

A financial statement that shows a company's revenues and expenses over a particular period, resulting in a profit or loss.

Consignment Basis

A business arrangement where goods are left with a third party to sell, and the owner of the goods receives payment only when the items are sold.