The APT Differs from the CAPM Because the APT _________

question 46

Multiple Choice

The APT differs from the CAPM because the APT _________.

• A) places more emphasis on market risk
• B) minimizes the importance of diversification
• C) recognizes multiple unsystematic risk factors
• D) recognizes multiple systematic risk factors
• E) none of these

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Definitions:

Decision Making

The process of choosing among multiple options or courses of action, based on factors such as data analysis, strategic goals, and resource availability.

Cost Driver

A factor that causes the cost of an activity or process to change, used in activity-based costing to allocate overheads more accurately.

Responsibility Centre

A unit or department within an organization, headed by a manager, who is accountable for its activities and financial performance.

Direct Costs

Expenses that can be directly attributed to the production of a specific product or service, such as materials and labor.