A pure factor portfolio is one which can be formed by
A) buying and short selling a large number of securities in appropriate proportions to produce zero non-factor risk.
B) buying securities and borrowing at the risk free rate to produce a unit sensitivity to the particular factor.
C) borrowing at the risk free rate in order to purchase a large number of securities in order to produce zero sensitivity to any other factors.
D) buying a large number of securities such that the portfolio possesses a unit sensitivity to the particular factor and has zero non-factor risk.

Question

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The Answer of A pure factor portfolio is one which can be formed by
A) buying and short selling a large number of securities in appropriate proportions to produce zero non-factor risk.
B) buying securities and borrowing at the risk free rate to produce a unit sensitivity to the particular factor.
C) borrowing at the risk free rate in order to purchase a large number of securities in order to produce zero sensitivity to any other factors.
D) buying a large number of securities such that the portfolio possesses a unit sensitivity to the particular factor and has zero non-factor risk.

A Pure Factor Portfolio Is One Which Can Be Formed