Since the factors and their measurement for use in the arbitrage pricing theory (APT )model have become fairly standardized,the APT model is becoming a more popular alternative to the CAPM in estimating the market risk premium.

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In practice, implementation of the model has been tricky, as there is little agreement about how many factors there are, what the factors represent, or how to measure the factors. For this reason, use of the APT resides primarily in the classroom.

Since the Factors and Their Measurement for Use in the Arbitrage