Discuss the Advantages of the Multifactor APT Over the Single

question 39

Essay

Discuss the advantages of the multifactor APT over the single factor APT and the CAPM.What is one shortcoming of the multifactor APT and how does this shortcoming compare to CAPM implications

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Definitions:

Conditioned Stimulus

Conditioned stimulus is a previously neutral stimulus that, after becoming associated with an unconditioned stimulus, eventually comes to trigger a conditioned response.

Neutral Stimulus

An initially inactive stimulus that, through association, acquires the capacity to evoke a conditioned response.

Higher Order Conditioning

A process in behavioral psychology where a conditioned stimulus is paired with a new neutral stimulus, creating a second-level conditioned response.

Conditioned Stimulus

A previously neutral stimulus that, after being paired with an unconditioned stimulus, elicits a conditioned response.