Page 2 of 6 Page 1 Next Page 1 2 3 Question 4 (1 point) Listen Page 2 4 5 6 What is the advantage of using a factor-based model of individual stock returns to model dependencies between many stocks? Page 3 a. Factor-based models require far fewer parameters to be estimated b. Covariances between stock returns in a factor-based model depend on covariances between a few factors and their associated factor loadings Page 4 10 12 c. There is no advantage to using a factor-based model of individual stock returns to model dependencies between stocks Page 5 a and b 13 14 15