A Similarity Between APT and CAPM Is That Both

question 26

Multiple Choice

A similarity between APT and CAPM is that both

• A) assume security sensitivities are explained by beta.
• B) assumes investors want the largest return for a given level of risk.
• C) make the same assumption about riskfree lending rates.
• D) use the covariance between a security and the market.

---

Definitions:

Filing

The process of submitting documents, typically to a government or regulatory body, in accordance with legal requirements or procedures.

SEC

The Securities and Exchange Commission, a U.S. federal agency responsible for regulating the securities industry and protecting investors.

Accounting Profession

This refers to the field involving the measurement, processing, and communication of financial and non-financial information about economic entities such as businesses and corporations.

EDGAR

The Electronic Data Gathering, Analysis, and Retrieval system used by the U.S. Securities and Exchange Commission (SEC) for the submission of documents.