1) CAPM assigns a beta of 1 to the market while APT assigns the market a beta of zero.

Assuming the single-factor APT model applies, the factor beta for the market portfolio is:

		zero.
		one.
		the average of the risk-free beta and the beta for the highest risk security in the portfolio.
		impossible to calculate without collecting sample data.
		irrelevant to the model.

2) Which one of the following statements is true?

		Both APT and CAPM argue that expected excess return must be proportional to the beta(s).
		APT and CAPM are the only quantitative approaches to measure expected returns in risky assets.
		Both CAPM and APT are empirical models.
		CAPM provides the means for a more-detailed estimate of a security?s expected return than does APT.