Which Pricing Model Provides No Guidance Concerning the Determination of the Risk

question 7

Multiple Choice

Which pricing model provides no guidance concerning the determination of the risk premium on factor portfolios?

• A)The CAPM
• B)The multifactor APT
• C)Both the CAPM and the multifactor APT
• D)Neither the CAPM nor the multifactor APT
• E)None of the above is a true statement.

---

Definitions:

Different Performance

Fulfillment of contractual obligations in a manner that is different from what was specifically agreed upon, sometimes acceptable with mutual consent.

Original Duty

The fundamental obligation or responsibility that a party has in a contractual or legal relationship.

Enforce

To compel obedience or compliance through legal or authoritative means; to ensure the fulfillment of a requirement.

Give Consideration

In contract law, the act of offering something of value, required by both parties for a contract to be legally binding.