The Most Significant Conceptual Difference Between the Arbitrage Pricing Theory

question 58

Multiple Choice

The most significant conceptual difference between the arbitrage pricing theory (APT) and the capital asset pricing model (CAPM) is that the CAPM ________.

• A)places less emphasis on market risk
• B)recognises multiple unsystematic risk factors
• C)recognises only one systematic risk factor
• D)recognises multiple systematic risk factors

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Definitions:

Flex

The action of tightening a muscle or muscles to make it or them stand out or become rigid, often demonstrating strength.

Extend

To stretch or spread out; to prolong in duration or space.

Abduct

To move a limb or other part of the body away from the midline or another part of the body.

Skeletal Muscles

Muscles attached to bones that are responsible for movement, posture, and stability, known for being under voluntary control.