n NISM Certifications
XXI NISM Series XXI-A
Medium

Identify which of these can be a probable factor in a Multi-factor model of asset returns?

Practice question from NISM XXI A for PMS - Mock Test 2 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Gold Prices

  2. GDP Growth

    Correct answer

  3. C

    Priority Sector Lending by RBI

  4. D

    Industry Demand-Supply Gap

Why this is the answer

Multi-factor models often include macroeconomic variables like GDP growth, inflation, and interest rates as they are crucial for forecasting asset returns. Gold prices and priority sector lending do not typically appear as primary factors in such models.

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