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NEW QUESTION: 1
Samuel Edson, CFA, portfolio manager for Driver Associates, employs a multifactor model to evaluate individual stocks and portfolios. Edson examines several possible risk factors and finds two that are priced in the marketplace. These two factors are investor sentiment (IS) risk and business cycle (BC) risk. Edson manages three equity portfolios (A, Bt and Q and derives the following relationships for each portfolio, as well as for the S&P 500 stock market index:
Portfolios A and B are well-diversified, while C is a less than fully diversified, value-oriented portfolio. FJS is the surprise in investor sentiment, and FBC is the surprise in the business cycle. Surprises in the risk factors are defined as the difference between the actual value and the predicted value.
Exhibit 1 provides data for the actual and predicted values for the investor sentiment and business cycle risk factors.
Driver Associates uses a two-factor Arbitrage Pricing Model to develop equilibrium expected returns for individual stocks and portfolios:
E(R) = risk free rate + , + , (8)
where:
At the time of Edson's analysis, the long-term government bond yield was 5%.
Equations (1) through (4) are examples of:
A. fundamental factor models.
B. macroeconomic factor models.
C. statistical factor models.
Answer: B
Explanation:
Explanation/Reference:
Explanation:
The models in equations 1 through 4 employ factors derived from macioeconomic variables. (Study Session 18, LOS 64.j)
NEW QUESTION: 2
Which two approaches should you use to profile a prospective customer? (Choose two.)
A. Offer the customer free technical training.
B. Interview key stakeholders.
C. Present a service level agreement.
D. Pursue a demo workshop.
E. Present briefings to the customer.
Answer: B,E
NEW QUESTION: 3
The process _______ provides service to access the GAIA configuration database.
A. ipsrd
B. confd
C. fwm
D. configdbd
Answer: B
NEW QUESTION: 4
When building a NIC team (virtual port channel) between a host and a pair of Cisco Nexus 5000 Series Switches that will carry FCoE traffic, what is the maximum number of physical links that can exist in
the team?
A. 0
B. 1
C. 2
D. 3
E. 4
Answer: C
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