An Alternative Explanation for an Outcome Is Known as A/an

question 21

Multiple Choice

An alternative explanation for an outcome is known as a/an:

• A) Confound
• B) Alternative
• C) Confederate
• D) Secondary explanation
• E) None of the above

---

Definitions:

Systematic Component

The part of an investment’s return or risk that is attributable to broad market factors affecting all investments to some degree.

Single Factor Model

A financial model that describes the return on a security as a function of a single factor, typically the market return, plus security-specific variations.

Risk Premium

The extra return expected by an investor for holding a risky asset instead of a risk-free asset, serving as compensation for bearing additional risk.