The feature of arbitrage pricing theory (APT) that offers the greatest potential advantage over the simple CAPM

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The feature of arbitrage pricing theory (APT) that offers the greatest potential advantage over the simple CAPM is the:
a. Identification of anticipated changes in production, inflation, and term structure of interest rates as key factors explaining the risk–return relationship.
b. Superior measurement of the risk-free rate of return over historical time periods.
c. Variability of coefficients of sensitivity to the APT factors for a given asset over time.
d. Use of several factors instead of a single market index to explain the risk–return relationship.

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Investments

ISBN: 9780073530703

9th Edition

Authors: Zvi Bodie, Alex Kane, Alan J. Marcus

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