Help
Course Catalog > Portfolios > 500
Portfolios 506: Factor Investing

Test your knowledge

Choose wisely. There is only one correct answer to each question.

0%
Keep studying!
Review your answers below to learn more.
1.
Style investing is a kind of factor investing that deals with _______.
Choose wisely. There is only one correct answer.
Two factors -- size (large-small) and value (value-growth).
2.
Factor investing includes the study of _______.
Choose wisely. There is only one correct answer.
All of the above. These factors and a few more are studied in factor investing.
3.
Rational factor theory deals with how the market prices _______.
Choose wisely. There is only one correct answer.
Risks. Factor investing is thus about finding the optimal portfolio of factor risks.
4.
What is a factor?
Choose wisely. There is only one correct answer.
An attribute of an asset that both explains and produces excess return. An attribute of an asset that both explains and produces excess return.
5.
When doing research on investing behavior, controlling for exposure to size, value, and momentum will reduce the effect of alpha.
Choose wisely. There is only one correct answer.
True. Since alpha is considered the excess return attributable to a manager's skill, controlling for it will reduce the role of that skill. Over the past few decades, that has raised the bar for being a truly skilled manager.