Provided a proxy for the market portfolio could be found, then the CAPM and the APT would ________.
A) contradict each other in their assumptions
B) prove inconsistent
C) prove somewhat consistent
D) demonstrate perfect consistency

Question

Quizplus · Accepted Answer

The CAPM and the APT would prove somewhat consistent if a proxy for the market portfolio could be found. While they differ in their assumptions, they both provide a framework for pricing assets based on their risk relative to the market. Therefore, they could be used together to provide a more comprehensive understanding of asset pricing.

Provided a Proxy for the Market Portfolio Could Be Found