G
Gareth
Member
You are asked to set out the equation for the expected return on the Arbitage Pricing Theory model.
Solution says:
but to me this is fundamentally flawed. The n macroeconomic factors are assumed to be random variables with zero mean under the APT model, so this is can't be right.
Solution says:

but to me this is fundamentally flawed. The n macroeconomic factors are assumed to be random variables with zero mean under the APT model, so this is can't be right.