The arbitrage pricing theory (APT):
A) is not concerned with a stock's sensitivity to basic economic factors.
B) takes into account more factors than the CAPM and is a more general model.
C) is more concerned about market equilibrium than the CAPM.
D) is easier to use in the investment world because its factors are more readily observable than those of the CAPM.

Question

Quizplus · Accepted Answer

The Arbitrage Pricing Theory (APT) indeed considers multiple factors beyond the market risk factor included in the Capital Asset Pricing Model (CAPM), making it a more general approach that can account for various economic and financial variables.