What the capm and apt attempt to model

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1) Explain what the CAPM and APT attempt to model. What are the main differences between these two asset pricing models?

2) Under what circumstances would the APT be preferred over the CAPM as a tool for selecting stocks for the fund portfolio?

3) Between 1980 and 2000, the standard deviation of the returns for the NIKKEI and the DJIA indexes were 0.08 and 0.10, respectively, and the covariance of these index returns was 0.0007. What was the correlation coefficient between the two market indicators?

Reference no: EM132999222

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