Refer to the Following List

question 2

Multiple Choice

Refer to the following list. Which are not assumptions of the Arbitrage Pricing model? (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.

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

---

Definitions:

Conflict

A situation where there is a disagreement or opposition between parties, which can stem from different views, interests, or goals.

Group Size

Refers to the number of individuals making up a group, which can impact the group's dynamics, interaction, and effectiveness.

Verbal Participation

The extent to which individuals contribute to discussions or communication through spoken words.

Conjunctive Tasks

Tasks in which group performance is limited by the performance of the poorest group member.