Vidyalelo
Commerce · Q690

Financial Management

Graduate and Post Graduate · Commerce · question 690

Q690

In arbitrage pricing theory, required returns are functioned of two factors which have

A.
dividend policy
B.
market risk
C.
historical policy
D.
Both A and B
Answer

Answer: Option D

Solution

Answer: Option D
Solution:
In arbitrage pricing theory, required returns are functioned of two factors which have dividend policy and market risk. Arbitrage pricing theory (APT) is a multi-factor asset pricing model based on the idea that an asset's returns can be predicted using the linear relationship between the asset’s expected return and a number of macroeconomic variables that capture systematic risk.