Question: The Capital Asset Pricing Model (CAPM) is often described as an off-the-shelf suit whereas the Arbitrage Pricing Theory (APT) is colloquially called a bespoke suit.

The Capital Asset Pricing Model (CAPM) is often described as an off-the-shelf suit whereas the Arbitrage Pricing Theory (APT) is colloquially called a bespoke suit. What is the difference between these models? Describe and explain a real-world scenario were using APT would be more advantageous than CAPM.

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