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part A Part b APM - Which is...

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Finance

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Part b
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APM - Which is True about the APM? The APM is essentially a utility based valuation model that posits a linear relationship between the returns of an asset and the market risk premium. The APM is essentially a utility based valuation model that posits a linear relationship between the returns of an asset and changes in an unknown number of unknown economic factors. O The APM is essentially an arbitrage based valuation model that posits a relationship between the returns of an asset and only the market risk premium. O The APM is essentially an arbitrage based valuation model that posits a relationship between the returns of an asset and the returns or' values of a set of unknown economic factors. Which are APM assumptions or characteristics? Investors have a particular utility function O A single economic factor determines the risk premium for asset returns O Markets are perfect O Investors are well diversified O Systematic Risk is only relevant risk O All of the above O none of the above

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