1. In the market model framework, the covariance between security returns arises due to the sensitivity of the security returns to the market index.

A. YES B.NO

2.The Single Factor Model

a. gives us a different way of calculating expected return and standard deviation of a portfolio.

b. requires fewer inputs to calculate expected return and standard deviation of a portfolio

c. leads to internally consistent set of inputs for calculating expected return and standard deviation of the portfolio

d. All of the above