9. The Arbitrage Pricing Theory Which of the following statements about the Arbitrage Pricing Theory (APT) are correct? Check all that apply. The APT assumes that all investors hold the market portfolio. The APT is more restrictive than the Capital Asset Pricing Model (CAPM). The APT does not restrict the number or nature of the factors relevant to the determination of a stock's return. The APT does not identify the relevant factors. Prabha, an analyst at Butoh Tech (BT), models the company's stock assuming that all stocks' returns depend on only three risk factors: inflation, industrial production, and the aggregate degree of risk aversion. The risk-free rate is ref = 5%, the return on the market is rm = 7%, and the rest of the available data is given in the following table: Value 15% 10% 4% Variable The required rate of return on an inflation portfolio, r The required return on an industrial production portfolio, 12 The required return on a risk-bearing portfolio, r3 Factor sensitivity to the inflation portfolio, bu Factor sensitivity to the industrial production portfolio, b2 Factor sensitivity to the risk-bearing portfolio, b3 Butoh Tech's beta, bet 0.4 -0.6 0.9 0.65 Using the APT model, Prabha calculates that BT's required rate of return is 6.30% If Prabha used the Capital Asset Pricing Model, she would have calculated that BT's required rate of return is