USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 93

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

-Refer to Exhibit 7.8. In the list above, which are assumptions of the Arbitrage Pricing Model?

• A) (1) and (4)
• B) (1), (2), and (3)
• C) (1), (3), and (5)
• D) (2), (3), (4), and (6)
• E) (1), (2), (3), (4), (5), and (6)

---

Definitions:

Diseconomies of Scale

Increases in cost per unit when output is expanded, often due to inefficiencies arising from becoming too large.

Certified Public Accountants

Professionals who have passed the CPA examination and met all other state certification requirements, authorized to provide accounting services to the public.

Diseconomies of Scale

A situation where, as a firm increases its production, the costs per unit increase.

Constant Returns to Scale

A situation in which increasing the amount of inputs results in a proportional increase in outputs.