Question: How does arbitrage in the APT model work? Arbitrage is risk free in a diversified world. H:Arbitrage involves buying an underpriced security and shorting an

How does arbitrage in the APT model work? Arbitrage is risk free in a diversified world. H:Arbitrage involves buying an underpriced security and shorting an overpriced security, until the prices of both securities converge to II: Arbitrageurs earn alpha with zero beta II, IN fundamentals HI 111111

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