Studies strongly suggest that the CAPM be abandoned and replaced with the APT.

Question

Quizplus · Accepted Answer

While some studies criticize the Capital Asset Pricing Model (CAPM) for its assumptions and limitations, it has not been universally suggested to be abandoned. The Arbitrage Pricing Theory (APT) is considered an alternative or complementary approach rather than a replacement, as both models have their own applications and advantages in finance.

Studies Strongly Suggest That the CAPM Be Abandoned and Replaced