Assuming That the Single Factor APT Model Applies,the Beta for the Market

question 40

Multiple Choice

Assuming that the single factor APT model applies,the beta for the market portfolio is:

• A) zero.
• B) one.
• C) the average of the risk free beta and the beta for the highest risk security.
• D) impossible to calculate without collecting sample data.
• E) None of these.

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Definitions:

Interest

The cost of borrowing money, typically expressed as an annual percentage rate.

Scheduled Payments

Predetermined amounts paid at regular intervals as part of a loan agreement or payment plan.

Defective Rate

The percentage of products that fail to meet quality standards or are considered malfunctioning out of the total produced.

Quality Control

The process of ensuring that products and services meet the required standards and specifications before they are delivered to the customer.