Which Pricing Model Provides No Guidance Concerning the Determination of the Risk

question 22

Multiple Choice

Which pricing model provides no guidance concerning the determination of the risk premium on factor portfolios?

• A) The CAPM
• B) The multifactor APT
• C) Both the CAPM and the multifactor APT
• D) Neither the CAPM nor the multifactor APT
• E) None of the options are correct.

---

Definitions:

Case-by-case Basis

An approach to decision-making that involves evaluating each situation individually rather than applying a general rule.

Commit Perjury

The act of lying or making verifiably false statements under oath in a legal proceeding, which is a criminal offense.

Race Riot

A violent conflict initiated based on racial tensions, often involving confrontations between members of different ethnic or racial groups.

Act Consequentialists

A branch of consequentialism focusing on the consequences of individual actions rather than general rules.