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Basic Question 1 of 11

Which pricing model provides no guidance concerning the determination of the risk premium on factor portfolios?

A. Multifactor APT
B. CAPM
C. SML

User Contributed Comments 1

User Comment
alyl21 APT don identify risk factors
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You have a wonderful website and definitely should take some credit for your members' outstanding grades.
Colin Sampaleanu

Colin Sampaleanu

Learning Outcome Statements

describe arbitrage pricing theory (APT), including its underlying assumptions and its relation to multifactor models;

define arbitrage opportunity and determine whether an arbitrage opportunity exists;

calculate the expected return on an asset given an asset's factor sensitivities and the factor risk premiums;

CFA® 2025 Level II Curriculum, Volume 5, Module 40.