Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. consider the single factor apt. portfolio a has a

Consider the single factor APT. Portfolio A has a beta of 0.78 and an expected...

90.2K

Verified Solution

Question

Finance

image

Consider the single factor APT. Portfolio A has a beta of 0.78 and an expected return of 17%. Portfolio B has a beta of 1.31 and an expected return of 28%. The risk-free rate of return is 3%. If you wanted to take advantage of an arbitrage opportunity, you should take a position in portfolio A and a position in portfolio B. short; short long; long short; long long; short holding; holding

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students