Match A. APT B. Both C. CAPM

1. A portfolio manager believes market risk is the only risk factor to explain required return

2. A Risk factor could be any variable, and there can be mutiple risk factors to explain asset returns

3. The intercept term is the asset's average return

4. Investors are asummed to be risk averse and we use a quadratic utility function for those investors

5. beta coefficient for a factor is the sensitivity to the factor

6. SML is a graphical representation to determine over or under valued assets

7. Underlying principle of the law of one price

8. The beta coefficient of a factor is found using regression