Investments
Investments
11th Edition
ISBN: 9781259277177
Author: Zvi Bodie Professor, Alex Kane, Alan J. Marcus Professor
Publisher: McGraw-Hill Education
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Chapter 10, Problem 8CP
Summary Introduction

To select: About the arbitrage pricing theory in contrast of the capital pricing model.

Introduction : The capital pricing model established a relation between expected return and the total risk of the portfolio. The return is the sum of the risk premium and the risk free rate of the portfolio. Arbitrage model is only applicable to the well-diversified portfolio.

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