In the Empirical Study of a Multifactor Model by Chen

question 46

Multiple Choice

In the empirical study of a multifactor model by Chen, Roll, and Ross, a factor (the factors) that appeared to have significant explanatory power in explaining security returns was (were)

• A) the change in the expected rate of inflation.
• B) the risk premium on corporate bonds.
• C) the unexpected change in the rate of inflation.
• D) industrial production.
• E) the risk premium on corporate bonds, the unexpected change in the rate of inflation, and industrial production.

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Definitions:

Advantages

The favorable factors or circumstances that lead to a beneficial outcome or give someone or something a superior position.

Disadvantages

Negative or less favorable conditions or circumstances that reduce the chances of success or effectiveness.

Network Design

The planning and structuring of a computer network infrastructure to meet specific requirements, such as performance, reliability, and security.

Organization Design

The arrangement of roles, responsibilities, and processes within an organization that aims to achieve its goals efficiently.