In the APT Model, What Is the Nonsystematic Standard Deviation

question 59

Multiple Choice

In the APT model, what is the nonsystematic standard deviation of an equally-weighted portfolio that has an average value of σ(e_i) equal to 25% and 50 securities?

• A) 12.5%
• B) 625%
• C) 0.5%
• D) 3.54%
• E) 14.59%

---

Definitions:

Great Britain

The island nation comprising England, Scotland, and Wales, which is part of the United Kingdom.

Pearl Harbor Attack

A surprise military strike by the Imperial Japanese Navy Air Service against the United States naval base at Pearl Harbor, Hawaii, on December 7, 1941, leading to the United States' entry into World War II.

Surprise Attack

A military tactic involving an unexpected assault on an adversary, with the intent of catching them off guard and gaining a tactical advantage.

Spanish-American War

A conflict fought between Spain and the United States in 1898, resulting in the U.S. gaining territories in the western Pacific and Latin America.