APT Assumes That an Arbitrage Portfolio's Nonfactor Risk Is

question 29

Multiple Choice

APT assumes that an arbitrage portfolio's nonfactor risk is

• A) -1.
• B) +.5.
• C) 0.
• D) -.5.

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Definitions:

Nonrenewable Resource

A natural resource that cannot be readily replaced by natural means at a quick enough pace to keep up with consumption.

Capital

The equipment and structures used to produce goods and services

Poor Country

A nation characterized by a low standard of living, low income per capita, and often lacking in basic infrastructure and services.

Rich Country

A nation characterized by a high gross domestic product (GDP) per capita, indicating a high standard of living, advanced technological infrastructure, and a well-developed economy.