In One of Their Empirical Tests of the APT,Roll and Ross

question 2

Multiple Choice

In one of their empirical tests of the APT,Roll and Ross examined the relationship between a security's returns and its own standard deviation.A finding of a statistically significant relationship would indicate that

• A) APT is valid because a security's unsystematic component would be eliminated by diversification.
• B) APT is valid because non-diversifiable components should explained by factor sensitivities.
• C) APT is invalid because a security's unsystematic component would be eliminated by diversification.
• D) APT is invalid because standard deviation is not an appropriate factor.
• E) None of the above.

Understand the significance of experimental data in understanding human diseases and the effects of genetic variations.

Understand the role and regulation of insulin in blood glucose levels.

Comprehend the structure, function, and differences among various lipoproteins and their impact on cardiovascular health.

Recognize the transport mechanisms of dietary fats through micelles and chylomicrons.

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Definitions:

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A system of government in which power is vested in the people, who rule either directly or through freely elected representatives.