Multifactor Models, Such as the One Constructed by Chen, Roll

Multiple Choice

Multifactor models, such as the one constructed by Chen, Roll, and Ross, can better describe assets' returns by

A) expanding beyond one factor to represent sources of systematic risk.
B) using variables that are easier to forecast ex ante.
C) calculating beta coefficients by an alternative method.
D) using only stocks with relatively stable returns.
E) ignoring firm-specific risk.