The Most Effective Way to Segment Customers Is by Geography

question 12

True/False

The most effective way to segment customers is by geography or demographic variables.

Recognize the distinction between APT and the Capital Asset Pricing Model (CAPM).

Understand the role of the risk-free rate in determining the expected returns according to APT.

Appreciate the importance of factor models in explaining security returns.

Determine the risk premiums on factor portfolios according to multifactor models.

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Definitions:

Proportional Tax

A tax that is the same percentage of the tax base regardless of the taxpayer’s income or wealth.

Public Swimming Pool

A swimming facility provided by the government or community organizations for public use, often for recreational or instructional purposes.

Flat

Often refers to a type of accommodation within a building, comprising a set of rooms designed for residential use; also used to describe something with a smooth, even surface without raised areas.

Proportional

Refers to a relationship between two quantities where they change at the same rate.