Question: 9. How does the arbitrage pricing theory (APT) differ from the capital asset pricing model (CAPM)? What are the similarities of the two models? 100

9. How does the arbitrage pricing theory (APT) differ from the capital asset pricing model (CAPM)? What are the similarities of the two models?

100 Part I Foundations of Finance 1.

a. R, = .08 + 1.25(.15 - .08) = 16.75%

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