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Arbitrage pricing theory

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Reference no: EM133058425

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.

Reference no: EM133058425

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