Cho, Elton, and Gruber tested the APT by examining the number of factors in the return generating process and found that
A) five factors were required using Roll-Ross procedures.
B) six factors were present when using historical beta.
C) fundamental betas indicated a need for three factors.
D) All of these are correct.
E) None of these are correct.

Question

Quizplus · Accepted Answer

According to the given information, all of the options are correct. Cho, Elton, and Gruber found that 5 factors were required when using Roll-Ross procedures, 6 factors were present when using historical beta, and fundamental betas indicated a need for three factors. Therefore, option D is the best choice.

Cho, Elton, and Gruber Tested the APT by Examining the Number