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Arbitrage Pricing Model

Definition of 'Arbitrage Pricing Model'

An extension of the CAPM to include more than one factor (hence, an example of a multi-factor model) used to explain the returns on securities. Each factor has its own Beta coefficient.

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Related Terms

APT CAPM Arbitrage Arbitrage Pricing Theory Capital Asset Pricing Model Abitrage Black Scholes Security Market Line Seperation Theorem Characteristics Line Factor Model Model Theoretical Value Arbitrageurs Commodity Credit Corporation Peak Load Pricing Accelerator Model Data-Snooping Model Code for Directors Dealings

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