For a One-Factor Model, an Analyst Finds the Variance of the Factor

question 8

Multiple Choice

For a one-factor model, an analyst finds the variance of the factor is 4, the slope for the security is 2, and the variance of the random error is 12. The variance for the security is

• A) 28.
• B) 24.
• C) 16.
• D) 12.

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Definitions:

Eastern Europe

A geographical and cultural region in Europe, broadly defined by its location east of Western Europe.

Physical Characteristics

Traits that define the appearance and anatomy of organisms, including height, skin color, and body type.

Racial Group

People who share physical characteristics, such as skin color, that members of a society consider socially important.

Society Consider

Society considers involves the process by which cultural, moral, ethical, and value-based judgments and norms are made by the collective consensus within a community or society.