Advantage(s)of the APT Is(are)

question 10

Multiple Choice

Advantage(s) of the APT is(are)

• A)that the model provides specific guidance concerning the determination of the risk premiums on the factor portfolios.
• B)that the model does not require a specific benchmark market portfolio.
• C)that risk need not be considered.
• D)A and B.
• E)B and C.

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Definitions:

Principal's Benefit

The advantages or profits derived by an individual who has authorized another (an agent) to act on their behalf.

Disclosed

Revealed or made known, often referring to information that was previously private or confidential.

Implied Warranty

A legal guarantee that a product will meet a minimum set of standards of quality and functionality without being explicitly stated.

Breach of Contract

The failure to perform as stated or agreed upon in a contract.