Question
The general purpose of identifying multiple factors in the APT model is to: A. identify the factors that have the largest impact on the market
The general purpose of identifying multiple factors in the APT model is to: A. identify the factors that have the largest impact on the market rate of return. B. reduce the slope of the security market line, thereby reducing portfolio risk. C. identify the quantity of each factor that is needed to reduce a portfolio's risk, as measured by beta, to a level equal to that of the overall market. D. reduce the unsystematic risk to a level where the unsystematic risk of one security is unrelated to the unsystematic risk of any other security held within the same portfolio. E. identify and eliminate all systematic risks from a portfolio.
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