# Mcq arbitrage pricing theiry

This theory was created in by the economist, Stephen Ross. The theory aims to pinpoint the fair market price of a security that may be temporarily mispriced. The theory assumes that market action is less than always perfectly efficient, and therefore occasionally results in assets being mispriced — either overvalued or undervalued — for a brief period of time. However, market action should eventually correct the situation, moving price back to its fair market value. Check our 'Site Updates' for the latest news.

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Multiple Choice Questions: 1. Bob sold short shares of a stock at \$55 per share. The initial margin is 60%, which was met exactly. At what (closest) stock price will . Arbitrage Pricing Theory and Multifactor Models of Risk and Return Multiple Choice Questions 1.

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Chapter 10 Arbitrage Pricing Theory and Multifactor Models of Risk and Return 4. The APT was developed in by _____. 5. A _____ portfolio is a well-diversified portfolio constructed to have a beta of 1 on one of the factors and a beta of 0 on any other factor.

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Arbitrage Pricing Theory - Understanding How APT Works