CFA Practice Question

There are 57 practice questions for this study session.

CFA Practice Question

The Pastor-Stambaugh model says that below-average liquidity will tend to:

A. have positive liquidity beta and decrease required return.
B. have positive liquidity beta and increase required return.
C. have negative liquidity beta and decrease required return.
Correct Answer: B

User Contributed Comments 5

User Comment
GIJCFA (n(n+1)/2) - 100 = 4950.
ssradja alternatively, n(n-1)/2 = 4950.
bmeisner follows from n choose r = n factorial (100!) divided by the product of r factorial (2!) and n-r factorial (98!) which is just 100*99/2.
ljamieson what does that have to do with the P-S model?
ljamieson it's good to know if you have to program it.
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