Multifactor Models Seek to Improve the Performance of the Single-Index

question 40

Multiple Choice

Multifactor models seek to improve the performance of the single-index model by

• A)modeling the systematic component of firm returns in greater detail.
• B)incorporating firm-specific components into the pricing model.
• C)allowing for multiple economic factors to have differential effects.
• D)All of the options.
• E)None of the options is true.

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Definitions:

Fixed-Ratio Schedule

In operant conditioning, a reinforcement schedule that reinforces a response only after a specified number of responses.

Specified Number

A set or exact amount or number that has been identified or determined.

Response Is Reinforced

The process by which a behavior becomes more likely to occur due to the consequences that follow it.

Immediate Reinforcers

Stimuli that immediately follow a behavior and increase the likelihood of its future occurrence.