A risk analyst at a bank is explaining to an intern the use of the Arbitrage Pricing Theory (APT) in estimating the expected return of a security. The risk analyst uses the following APT formula in the discussion:
Ri=E(Ri)+βi1[I1−E(I1)]+⋯+βiK[IK−E(IK)]+ei
Which of the following is a correct interpretation of βik?_
