The Feature of the APT That Offers the Greatest Potential

Multiple Choice

The feature of the APT that offers the greatest potential advantage over the CAPM is the ______________.

A) use of several factors instead of a single market index to explain the risk-return relationship
B) identification of anticipated changes in production,inflation and term structure as key factors in explaining the risk-return relationship
C) superior measurement of the risk-free rate of return over historical time periods
D) variability of coefficients of sensitivity to the APT factors for a given asset over time
E) none of these