Difference between the CAPM and the Arbitrage Pricing Theory

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Question - You have been hired at the investment firm of Bowers & Noon. One of its clients doesn't understand the value of diversification or why stocks with the biggest standard deviations don't always have the highest expected returns. Your assignment is to address the client's concerns by showing the client how to answer the following questions: Briefly explain the difference between the CAPM and the Arbitrage Pricing Theory (APT).

Reference no: EM132895832

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