Arbitrage Pricing Theory Definition

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Arbitrage Pricing Theory

Definition

APT. An alternative asset pricing model to the Capital Asset Pricing Model. Unlike the Capital Asset Pricing Model, which specifies returns as a linear function of only systematic risk, Arbitrage Pricing Theory may specify returns as a linear function of more than a single factor.

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'Arbitrage Pricing Theory' appears in the definitions of these other terms on BusinessDictionary.com

capital asset pricing model (CAPM), capital market theories

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