Consider the One-Factor APT

question 72

Multiple Choice

Consider the one-factor APT.The variance of returns on the factor portfolio is 9%.The beta of a well-diversified portfolio on the factor is 1.25.The variance of returns on the well-diversified portfolio is approximately __________.

• A)3.6%
• B)6.0%
• C)7.3%
• D)14.1%
• E)none of the above

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Definitions:

Fixed Ratio

A schedule of reinforcement where a response is reinforced only after a specified number of responses, often used in behavior modification programs.

Variable Interval

A reinforcement schedule in which the reinforcement is provided after a variable and unpredictable amount of time has passed following a behavior.

Fixed Interval

In operant conditioning, a schedule of reinforcement where the first response after a specified amount of time has elapsed is rewarded.

Continuous Reinforcement

A learning process in which a behavior is reinforced each time it occurs, leading to faster acquisition of the behavior.