A Factor Is a Variable That

question 33

Multiple Choice

A factor is a variable that:

• A) affects the returns of risky assets in a systematic fashion.
• B) affects the returns of risky assets in an unsystematic fashion.
• C) correlates with risky asset returns in a unsystematic fashion.
• D) does not correlate with the returns of risky assets in a systematic fashion.
• E) None of these.

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Definitions:

Emerging Adulthood

A phase of the life span between adolescence and full-fledged adulthood, typically ranging from the late teens through the twenties.

Optimistic Belief

The tendency to hold a positive outlook towards the future or the expectation of good outcomes.

Identity Exploration

The process of examining, questioning, and evaluating one's own identity, values, beliefs, and place within the world.

Self-focus

The practice of turning one's attention inward towards one's own thoughts, feelings, and experiences, often leading to increased self-awareness.