Assuming that the single factor APT model applies,the beta for the market portfolio is:
A) zero.
B) one.
C) the average of the risk free beta and the beta for the highest risk security.
D) impossible to calculate without collecting sample data.
E) None of these.

Question

Quizplus · Accepted Answer

In the single factor APT model, the only factor that affects asset returns is the market portfolio. Therefore, the beta for the market portfolio is always assumed to be 1.0.

Assuming That the Single Factor APT Model Applies,the Beta for the Market