Jeffrey Bruner, CFA, uses the capital asset pricing model (CAPM) to help identify mispriced securities. A consultant suggests Bruner use the arbitrage pricing theory (APT) instead. In comparing the CAPM and the APT, the consultant made the following arguments:

a. Both the CAPM and the APT require a mean-variance efficient market portfolio.

b. Neither the CAPM nor the APT assumes normally distributed security returns.

c. The CAPM assumes that one specific factor explains security returns, but the APT does not. State whether each of the consultant's arguments is correct or incorrect. Indicate, for each incorrect argument, why the argument is incorrect.