- CFA Exams
- CFA Level I Exam
- Study Session 16. Portfolio Management (1)
- Reading 44. Using Multifactor Models
- Subject 1. Arbitrage pricing theory
CFA Practice Question
A similarity between the APT and CAPM model is that both models assume that ______.
A. their unique effects are independent and will not be diversified away in a large portfolio.
B. their unique effects are dependent and will be diversified away in a large portfolio.
C. their unique effects are independent and will be diversified away in a large portfolio.
User Contributed Comments 2
| User | Comment |
|---|---|
| dblueroom | unique effects refers to asset specific risks. |
| CFAJ | thank you |