To Evaluate the Choice of Risk Factors. Introduction: Arbitrage Pricing Theory (APT) is a substitute form of CAPM ( Capital Asset Pricing Model ). This hypothesis, as CAPM, gives financial specialists or investors assessed required rate of return for the risky securities. APT reflects on risk premium premise indicated set of elements notwithstanding the correlation of the cost of the asset with expected surplus return on the portfolio.

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Chapter 12, Problem 3CQ

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To determine: To Evaluate the Choice of Risk Factors.

Introduction:

Arbitrage Pricing Theory (APT) is a substitute form of CAPM (Capital Asset Pricing Model). This hypothesis, as CAPM, gives financial specialists or investors assessed required rate of return for the risky securities. APT reflects on risk premium premise indicated set of elements notwithstanding the correlation of the cost of the asset with expected surplus return on the portfolio.

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