Investments, 11th Edition (exclude Access Card)
Investments, 11th Edition (exclude Access Card)
11th Edition
ISBN: 9781260201543
Author: Zvi Bodie Professor; Alex Kane; Alan J. Marcus Professor
Publisher: McGraw-Hill Education
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Chapter 10, Problem 18PS

A

Summary Introduction

To calculate: The APT security market line for single factor market.

Introduction: An arbitrage pricing model theory is used when market is not in equilibrium situation. Many assets have different prices in different markets. This situation is useful when investor wants to gain more profit.

B

Summary Introduction

To calculate: The APT model for the multi-factor model.

Introduction: An APT model stands for arbitrage pricing model theory and used for the pricing of the assets in different markets. In multi factor model return is calculated by using expected return and number of macroeconomic variables.

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