Financial Risk Manager Part 1

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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:
$R_i = E(R_i) + \beta_{i1}[I_1 - E(I_1)] + ... + \beta_{ik}[I_k - E(I_k)] + e_i$
Which of the following is a correct interpretation of $\beta_{ik}$ ?

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It is a coefficient measuring the effect of changes in the rate of return of security $k$ on the expected value of factor $I$ .

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It measures the idiosyncratic random shock to the price of security $i$ which has a mean of zero.

It measures how the changes in the surprise factor $k$ will affect the rate of return of security $i$ .