1. Refer to the following list. Which are not assumptions of the Arbitrage Pricing model? (1) Capital markets are perfectly competitive. (2) Quadratic utility function. (3) Investors prefer more wealth to less wealth with certainty. (4) Normally distributed security returns. (5) Representation as a K factor model. (6) A market portfolio that is mean-variance efficient. a. (1) and (3) b. (1), (2), and (3) c. (1), (2), and (5) d. (2), (4), and (6) e. All six are assumptions

1. Refer to the following list. Which are not assumptions of the Arbitrage Pricing model? (1) Capital markets are perfectly competitive. (2) Quadratic utility function. (3) Investors prefer more wealth to less wealth with certainty. (4) Normally distributed security returns. (5) Representation as a K factor model. (6) A market portfolio that is mean-variance efficient. a. (1) and (3) b. (1), (2), and (3) c. (1), (2), and (5) d. (2), (4), and (6) e. All six are assumptions

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter18: Asymmetric Information

Section: Chapter Questions

Problem 18.10P

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