Multiple Choice
The arbitrage pricing theory (APT) :
A) considers only one factor and is a narrower model than the CAPM.
B) considers more factors than the CAPM and is a broader model.
C) is useful only for well-diversified portfolios of common stock.
D) is easy to implement because the factors are readily observable.
Correct Answer:
Verified
Correct Answer:
Verified
Q40: The market has an expected return of
Q41: If a stock has a beta greater
Q42: Select the incorrect statement regarding the CML.
Q43: With the APT, risk is defined in
Q44: If the risk-free lending rate is lower
Q46: Compare the capital market line and the
Q47: Tests of the CAPM suggest the trade-off
Q48: Some securities are considered to be "defensive"
Q49: McDonald's has a below average beta.
Q50: The SML can be used to analyze