Consider the Single Factor APT

question 32

Multiple Choice

Consider the single factor APT.Portfolio A has a beta of 0.5 and an expected return of 12%.Portfolio B has a beta of 0.4 and an expected return of 13%.The risk-free rate of return is 5%.If you wanted to take advantage of an arbitrage opportunity,you should take a short position in portfolio _________ and a long position in portfolio _________.

• A)A, A
• B)A, B
• C)B, A
• D)B, B
• E)none of the above

Understand the role and importance of direct labor and machine time in product cost calculation.

Comprehend the theoretical concepts behind cost allocation, including insulating versus noninsulating allocations.

Analyze the reasons behind allocating internal costs and the criteria for a sound allocation system.

Understand the concept of monopolistic competition and its implications on pricing and output.

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Definitions:

Specific Phobia

An intense, irrational fear of a specific object, situation, or activity that leads to avoidance behavior or extreme distress when encountered.

Blood

A vital bodily fluid in humans and other animals that delivers necessary substances such as nutrients and oxygen to cells and transports waste products away.

Immediate And Irrational

Decisions or reactions that occur without logical reasoning or deliberation, often driven by instinct or emotion.

Limbic System

A complex system of nerves and networks in the brain, involved in emotions and drives, including fear, pleasure, and anger.