The assumptions found in the APT appear __________ the assumptions of the CAPM.
A) similar to
B) different than
C) relatively consistent with
D) slightly different than

Question

Quizplus · Accepted Answer

The assumptions of the Arbitrage Pricing Theory (APT) are different from those of the Capital Asset Pricing Model (CAPM). APT does not rely on a market portfolio and allows for multiple factors, whereas CAPM is based on a single-factor model with a market portfolio.

The Assumptions Found in the APT Appear __________ the Assumptions