The APT differs from the CAPM because the APT A) places more emphasis on market risk. B) minimizes the importance of diversification. C) recognizes multiple unsystematic risk factors. D) recognizes multiple systematic risk factors.

Question

Quizplus · Accepted Answer

The CAPM assumes that market returns represent systematic risk. The APT recognizes that other macroeconomic factors may be systematic risk factors.

The APT Differs from the CAPM Because the APT