Risk Factors in the APT Must Possess All of the Following

question 50

Multiple Choice

Risk factors in the APT must possess all of the following the characteristics except:

• A)Factors must be readily observable in risk/return space.
• B)Each factor must have a pervasive influence on stock returns
• C)The factors must influence expected return.
• D)Factors must be unpredictable.

---

Definitions:

Empowerment

The process of giving individuals or groups more control over their lives or the situation they are in.

Expert Power

The influence and authority a person gains from having expertise or specialized knowledge in a particular area.

Legitimate Power

The authority someone has because of their position or role within an organization, recognized by others as right and proper.

Leadership

The act of guiding or influencing people towards achieving a common goal, often involving qualities such as vision, communication, and motivation.