Q696
Complex statistical and mathematical theory is an approach, which is classified as
A.
arbitrage pricing theory
AnswerB.
arbitrage risk theory
C.
arbitrage dividend theory
D.
arbitrage market theory
Answer: Option A
Solution
Answer: Option A
Solution:
Complex statistical and mathematical theory is an approach, which is classified as arbitrage pricing theory. Arbitrage pricing theory (APT) is a multi-factor asset pricing model based on the idea that an asset's returns can be predicted using the linear relationship between the asset’s expected return and a number of macroeconomic variables that capture systematic risk.