In a Multifactor APT Model, the Coefficients on the Macro

question 2

Multiple Choice

In a multifactor APT model, the coefficients on the macro factors are often called

• A) systematic risk.
• B) firm-specific risk.
• C) idiosyncratic risk.
• D) factor loadings.

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Definitions:

Monocline

A geological fold in which all layers are inclined in the same direction.

Dome

A geological feature where rock layers are pushed upwards to form a rounded protrusion on Earth's surface.

Anticline

A type of fold that is arched upward and has its oldest beds at its core, often associated with oil and gas reservoirs.

Syncline

A fold in rock layers that dips downwards, where the youngest layers are at the core of the fold.