Which One of the Following Statements Is True

question 4

Multiple Choice

Which one of the following statements is true?

• A)Both APT and CAPM argue that expected excess return must be proportional to the beta(s).
• B)APT and CAPM are the only quantitative approaches to measure expected returns in risky assets.
• C)The factors to be used in the APT are easier to identify than the factor used in the CAPM.
• D)CAPM provides the means for a more-detailed estimate of a security's expected return than does APT.
• E)CAPM assigns a beta of 1 to the market while APT assigns the market a beta of zero.

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