Consider the One-Factor APT

question 14

Multiple Choice

Consider the one-factor APT. The variance of returns on the factor portfolio is 11. The beta of a well-diversified portfolio on the factor is 1.45. The variance of returns on the well-diversified portfolio is approximately

• A) 23.1.
• B) 6.0.
• C) 7.3.
• D) 14.1.

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Definitions:

Filler Hole

An opening or aperture through which a substance, such as oil or fuel, is added to a container, tank, or system.

Differential Carrier Housing

The casing that encloses the gears of a vehicle's differential, supporting its structure and maintaining alignment.

Lubrication Breakdown

Lubrication breakdown is the failure of a lubricant to perform its intended function of reducing friction and wear between moving parts, often due to contamination, overheating, or depletion.

Fatigue

Literally tired but used to describe components that have been worn out by old age.