【正文】 e factor and portfolio B has a beta of on the factor. The expected returns on portfolios A and B are 11% and 17%, respectively. Assume that the riskfree rate is 6% and that arbitrage opportunities exist. Suppose you invested $100,000 in the riskfree asset, $100,000 in portfolio B, and sold short $200,000 of portfolio A. Your expected profit from this strategy would be ______________.A.?$1,000B.$0C.$1,000D.$2,000E.$1,60022.Consider the onefactor APT. Assume that two portfolios, A and B, are well diversified. The betas of portfolios A and B are and , respectively. The expected returns on portfolios A and B are 19% and 24%, respectively. Assuming no arbitrage opportunities exist, the riskfree rate of return must be ____________.A.%B.%C.%D.%E.%23.Consider the multifactor APT. The risk premiums on the factor 1 and factor 2 portfolios are 5% and 3%, respectively. The riskfree rate of return is 10%. Stock A has an expected return of 19% and a beta on factor 1 of . Stock A has a beta on factor 2 of ________.A.B.C.D.E.24.Consider the single factor APT. Portfolios A and B have expected returns of 14% and 18%, respectively. The riskfree rate of return is 7%. Portfolio A has a beta of . If arbitrage opportunities are ruled out, portfolio B must have a beta of __________.A.B.C.D.E.There are three stocks, A, B, and C. You can either invest in these stocks or short sell them. There are three possible states of nature for economic growth in the uping year。 economic growth may be strong, moderate, or weak. The returns for the uping year on stocks A, B, and C for each of these states of nature are given below:25.If you invested in an equally weighted portfolio of stocks A and B, your portfolio return would be ___________ if economic growth were moderate.A.%B.%C.%D.%E.%26.If you invested in an equally weighted portfolio of stocks A and C, your portfolio return would be ____________ if economic growth was strong.A.%B.%C.%D.%E.%27.If you invested in an equally weighted portfolio of stocks B and C, your portfolio return would be _____________ if economic growth was weak.A.?%B.%C.%D.%E.%28.If you wanted to take advantage of a riskfree arbitrage opportunity, you should take a short position in _________ and a long position in an equally weighted portfolio of _______.A.A。 B and CB.B。 A and CC.C。 A and BD.A and B。 CE.No arbitrage opportunity exists.Consider the multifactor APT. There are two independent economic factors, F1and F2. The riskfree rate of return is 6%. The following information is available about two welldiversified portfolios:29.Assuming no arbitrage opportunities exist, the risk premium on the factor F1portfolio should be __________.A.3%B.4%C.5%D.6%E.2%30.Assuming no arbitrage opportunities exist, the risk premium on the factor F2 portfolio should be ___________.A.3%B.4%C.5%D.6%E.2%31.A zeroinvestment portfolio with a positive expected return arises when _________.A.an investor has downside risk onlyB.the law of prices is not violatedC.the opportunity set is not tangent to the capital allocation lineD.a riskfree arbitrage opportunity existsE.a riskfree arbitrage opportunity does not exist32.An investor will take as large a position as possible when an equilibrium price relationship is violated. This is an example of _________.A.a dominance argumentB.the meanvariance efficiency frontierC.a riskfree arbitrageD.the capital asset pricing modelE.the SML33.The APT differs from the CAPM because the APT _________.A.places more emphasis on market riskB.minimizes the importance of diversificationC.recognizes multiple unsystematic risk factorsD.recognizes multiple systematic risk factorsE.places more emphasis on systematic risk34.The feature of the APT that offers the greatest potential advantage over the CAPM is the ______________.A.use of several factors instead of a single market index to explain the riskreturn relationshipB.identification of anticipated changes in production, inflation, and term structure as key factors in explaining the riskreturn relationshipC.superior measurement of the riskfree rate of return over historical time periodsD.variability of coefficients of sensitivity to the APT factors for a given asset over timeE.superior measurement of the riskfree rate of return over historical time periods and variability of coefficients of sensitivity to the APT factors for a given asset over time35.In terms of the risk/return relationship in the APTA.only factor risk mands a risk premium in market equilibrium.B.only systematic risk is related to expected returns.C.only nonsystematic risk is related to expected returns.D.only factor risk mands a risk premium in market equilibrium and only systematic risk is related to expected returns.E.only factor risk mands a risk premium in market equilibrium and only nonsystematic risk is related to expected returns.36.The following factors might affect stock returns:A.the business cycle.B.interest rate fluctuations.C.inflation rates.D.the business cycle, interest rate fluctuations, and inflation rates.E.the relationship between past FRED spreads.37.Advantage(s) of the APT is(are)A.that the model provides specific guidance concerning the determination of the risk premiums on the factor portfolios.B.that the model does not require a specific benchmark market portfolio.C.that risk need not be considered.D.that the model provides specific guidance concerning the determination of the risk premiums on the factor portfolios and that the model does not require a specific benchmark market portfolio.E.that the model does not require a specific benchmark market port