In the Context of the Arbitrage Pricing Theory, as a Well-Diversified

question 57

Multiple Choice

In the context of the Arbitrage Pricing Theory, as a well-diversified portfolio becomes larger, its nonsystematic risk approaches

• A) one.
• B) infinity.
• C) zero.
• D) negative one.

---

Definitions:

Epigenetics

The study of heritable changes in gene expression that do not involve changes to the underlying DNA sequence.

Nature and Nurture

The debate regarding the relative contributions of genetic inheritance (nature) and environmental factors (nurture) to human development.

Heredity

The passing on of physical or mental characteristics genetically from one generation to another.

Genes and Chromosomes

Elements of heredity with genes being the molecular units of inheritance on chromosomes, which are long strands of DNA containing a sequence of genes.