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:

Short-Term Memory

Short-term memory is the capacity for holding a small amount of information in an active, readily available state for a short period of time.

Sensory Memory

The shortest-term element of memory, it acts as a buffer for stimuli received through the five senses which are retained accurately, but very briefly.

Implicit Memory

A type of long-term memory that operates without conscious awareness, influencing thoughts and behaviors.

Long-Term Memory

Long-term memory refers to the storage of information over an extended period, ranging from hours to a lifetime, and is critical for learning, decision-making, and identity.