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Exhibit 7-7 USE THE FOLLOWING INFORMATION FOR THE NEXT QUESTION(S) (1) Capital

question 20

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Exhibit 7-7
USE THE FOLLOWING INFORMATION FOR THE NEXT QUESTION(S) (1) Capital markets are perfectly competitive.
(2) Quadratic utility function.
(3) Investors prefer more wealth to less wealth with certainty.
(4) Normally distributed security returns.
(5) Representation as a K factor model.
(6) A market portfolio that is mean-variance efficient.
-Refer to Exhibit 7-7. Which are not assumptions of the Arbitrage Pricing model?

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Definitions:

Non-current

Term used to describe assets or liabilities that are not expected to turn into cash, be consumed, or paid within one year or the operating cycle, whichever is longer.

Instalment Payments

Payments made periodically towards the settlement of a debt or purchase price, typically including interest.

Interest

The charge for borrowing money or the compensation paid to depositors on their deposits, usually expressed as an annual percentage rate.

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