Which of the Following Is True of Firm Characteristics to Estimate

question 16

Multiple Choice

Which of the following is true of firm characteristics to estimate factors?

• A)It provides the most intuitive interpretation of the market factors.
• B)It uses macroeconomic time-series that capture changes in productivity,interest rates and inflation to act as proxies for the factors generating security returns.
• C)Portfolios are selected on the basis of past return anomalies.
• D)It assumes that covariances are constant.

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Definitions:

Corporate Members

Individuals who are part of a corporation and contribute to its functioning, whether through decision-making roles or as part of the workforce.

Cultural Assumptions

Unspoken, implicit beliefs held by a group of people that influence their perceptions and behaviors.

Superficial Aspect

An element or characteristic of something that is apparent or visible on the surface, but does not provide depth into the true nature or essence.

Coherent Set

A collection of elements or entities that are logically consistent, connected, or unified.