1. A factor model for security returns uses consumer sentiment as one of the factors. The numerical value for this factor used in the model for September would be

a. the value of consumer sentiment in September

b. the change in consumer sentiment from August to September

c. the expected change in consumer sentiment from August to September

d. the difference between the realized and expected values of consumer sentiment for September 2.

2. A factor model

a. describes the differences among the expected returns of securities

b. describes the variation in security returns around their expected returns

c. both a and b

d. neither a nor b