Financial Risk Manager Part 2
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Andrew Ang develops an analogy, writing "factors are to assets what nutrients are to food." His theory of factor risk premiums includes each of the following three ideas EXCEPT which is not in the theory?
A
Assets are bundles of factors (just as most foods are combinations of nutrients)
B
Factors do matter but asset classes do not (just as healthy eating is about the nutrients not the labels)
C
Different investors prefer and/or need different factors (just as different people have different nutritional needs)
D
Because factors represent different good times, most investors should seek exposure to most investable factors (just as most people should seek a balanced diet of most nutrients)