#### Learning Outcome Statements

My Note:

1. Arbitrage pricing theory *a. describe arbitrage pricing theory (APT), including its underlying assumptions and its relation to multifactor models;*
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b. define arbitrage opportunity and determine whether an arbitrage opportunity exists;*
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c. calculate the expected return on an asset given an asset's factor sensitivities and the factor risk premiums;*
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2. Factors and types of multifactor models *d. describe and compare macroeconomic factor models, fundamental factor models, and statistical factor models;*
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3. Multifactor models: selected applications *e. explain sources of active risk and interpret tracking risk and the information ratio;*
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f. describe uses of multifactor models and interpret the output of analyses based on multifactor models;*
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g. describe the potential benefits for investors in considering multiple risk dimensions when modeling asset returns.*
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