Which of the Following Statements Is/are True

question 3

Multiple Choice

Which of the following statements is/are true?

• A) Both APT and CAPM argue that expected excess return must be proportional to the beta(s).
• B) APT and CAPM are the only approaches to measure expected returns in risky assets.
• C) Both CAPM and APT are risk-based models.
• D) Both APT and CAPM argue that expected excess return must be proportional to the beta(s); and APT and CAPM are the only approaches to measure expected returns in risky assets.
• E) Both APT and CAPM argue that expected excess return must be proportional to the beta(s); and Both CAPM and APT are risk-based models.

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Definitions:

Strategic Business Units

Distinct units within a larger corporation that operate independently with their own strategy and objectives, often in different markets or industries.

Defamation

False statements that injure a person’s reputation.

Corporate Performance

A measurement of a firm's efficiency and profitability in fulfilling its objectives and achieving its goals.

Serious Financial Trouble

A condition where a person, organization, or country faces significant financial challenges that threaten their long-term stability and solvency.