Menu
Home
Advertise
Forums
Search forums
What's new
Unread posts
Latest activity
Earn Money
Review Website/Apps
Passive Income
Money apps
Paid Survey
Stock
Forex
Real estate
Paid to write
Social Media Monetization
Crytocurrency
Bitcoin (BTC)
Ethereum (ETH)
Crypto Exchange
Mining
Crypto Faucet / Airdrops
Binance
Business
Business strategy
Funding a business
Marketing
Digital Marketing
Social media marketing
Email marketing
Brand management
Personal Finance
Money Saving
Personal loan
Retirement
Debt help
Savings for Students
Tax relief
Insurance
Car Insurance
Life Insurance
Liability Insurance
Home Insurance
Health Insurance
Disability Insurance
FAQ
Log in
Register
What's new
Search
Search
Search titles only
By:
Search forums
Menu
Log in
Register
Install the app
Install
Home
Forums
Money Making Forums
Make Money Online
Stock
Arbitrage Pricing Theory (APT)
JavaScript is disabled. For a better experience, please enable JavaScript in your browser before proceeding.
You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an
alternative browser
.
Reply to thread
Message
[QUOTE="Holicent, post: 257611, member: 76163"] Arbitrage pricing theory is a substitute for Stephen Ross's capital asset pricing model, which also relies only on arbitrage theory. The APT suggests that there are numerous risk considerations that must be considered when determining risk-adjusted performance or alpha. Arbitrage theory holds that risk-adjusted returns can be measured by the difference between two prices (the return on the "underlying" and the return on the "hedge"). Arbitrage pricing theory uses discounted cash flow analysis to determine how much a hedge will cost for any given level of risk. For example, if you were to invest in a stock that was expected to grow at 10% per year, and you were able to find an undervalued stock that would return 9% per year, it would make sense to invest in this stock because it provides better value than your benchmark. This model assumes that you could find another company with similar characteristics and buy their shares (called a "replacement") at their current price. [/QUOTE]
Insert quotes…
Verification
Post reply
Home
Forums
Money Making Forums
Make Money Online
Stock
Arbitrage Pricing Theory (APT)
Top