Consider the Single-Factor APT

question 35

Multiple Choice

Consider the single-factor APT.Stocks A and B have expected returns of 15% and 18%,respectively.The risk-free rate of return is 6%.Stock B has a beta of 1.0.If arbitrage opportunities are ruled out,stock A has a beta of __________.

• A)0.67
• B)1.00
• C)1.30
• D)1.69
• E)none of the above

---

Definitions:

Retesting

The process of taking a test or evaluation again, typically to verify the reliability of the results or to check for improvements after interventions.

Specialized Skills

Particular abilities or expertise developed to perform specific tasks or functions proficiently, often requiring focused training or experience.

Aspect

A particular part or feature of something, or a way in which something can be viewed or considered.

Significant Brain Loss

Refers to substantial reduction in brain volume or the loss of neurons, which may result from aging, neurological diseases, or other factors.