One of the Basic Assumptions of the Time-Series Approach to Estimating

Multiple Choice

One of the basic assumptions of the time-series approach to estimating factor models is

A) the investor knows in advance the impact of inflation on historical returns
B) the investor knows in advance the relevant factors that influence security returns
C) the model builder begins with estimates of a security's sensitivities to certain factors
D) that the model builder knows nothing about factor values nor sensitivities