Based on the evidence, the arbitrage pricing model outperforms the CAPM.

Name: Based on the evidence, the arbitrage pricing model outperforms the CAPM.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The arbitrage pricing theory (APT) and the Capital Asset Pricing Model (CAPM) are both used to estimate the expected return on an investment, but neither consistently outperforms the other in all situations. The effectiveness of each model depends on the specific market conditions and assumptions being applied.

Based on the Evidence, the Arbitrage Pricing Model Outperforms the CAPM