Consider the One-Factor APT

question 38

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%
• E)none of the above

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Definitions:

Cerebellar Damage

Damage to the cerebellum, a part of the brain that regulates motor movements, which can result in loss of balance, coordination, and precision in movements.

Visual Shift

The change in visual attention or focus from one point to another, which can involve saccadic movements of the eyes or cognitive redirection of focus.

Cerebellar Hemispheres

The two symmetrical halves of the cerebellum that play crucial roles in motor control and coordination.

Limbs

The arms and legs of a human or the analogous appendages in other animals, used for movement and manipulation.