A multivariate estimation model for equity capital. The Arbitrage Pricing Theory incorporates several systematic risk analyses.
An asset pricing model that assumes a linear relation between required return and systematic risk as measured by 1 or more factors according to Rj = mj + b1jF1 + ... + bKjFK + ej.
A multivariate model for estimating the cost of equity capital, which incorporates several systematic risk factors.
An alternative model to the capital asset pricing model developed by Stephen Ross and based purely on arbitrage arguments.
Complex mathematical theory that suggests by using combination of long/short strategies, it is possible to construct a risk-free portfolio that gives a return above the risk-free interest rate.
Arbitrage pricing theory (APT), in Finance, is a general theory of asset pricing, that has become influential in the pricing of shares.