(APT) An approach to measuring the equilibrium risk/return relationship for a given stock as a function of multiple factors, rather than the single factor (the market return) used by CAPM. The APT is based on complex mathematical and statistical theory, but can account for several factors (such as GNP and level of inflation) in determining the required return for a particular stock.
(APT) An approach to measuring the equilibrium risk/return relationship for a given stock as a function of multiple factors, rather than the single factor (the market return) used by CAPM. The APT is based on complex mathematical and statistical theory, but can account for several factors (such as GNP and level of inflation) in determining the required return for a particular stock.