Arbitrage Pricing Theory Definition

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 is ...
... part of the Strategies subject.

Related Terms

APT - More

Stephen Ross - More

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

capital market theories, capital asset pricing model (CAPM)