- CFA Exams
- CFA Level I Exam
- Topic 9. Portfolio Management
- Learning Module 40. Using Multifactor Models
- Subject 1. Arbitrage Pricing Theory
CFA Practice Question
If there is only one factor (market risk) in an APT mode, APT then equals ______.
B. SML
C. CML
A. CAPM
B. SML
C. CML
Correct Answer: A
APT does not identify the risk factors to be included in the model. If the market risk is used as the only factor, the APT would equal CAPM.
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