In contrast to the capital asset pricing model, arbitrage pricing theory: a. Requires that markets be in
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a. Requires that markets be in equilibrium.
b. Uses risk premiums based on micro variables.
c. Specifies the number and identifies specific factors that determine expected returns.
d. Does not require the restrictive assumptions concerning the market portfolio.
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Arbitrage Procing Theory and CAPM model The Arbitrage pricing theory establishes a relationship betw...View the full answer
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