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What is arbitrage pricing model and how does it work?

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Question added by CA AMRIT BAHADUR KHADKA , Finance Manager , Enthusiasm Star General Trading LLC,Travel Blue Product India Pvt ltd & Enthusiasm Strategic Market
Date Posted: 2013/12/01

An asset pricing model based on the idea that an asset's returns can be predicted using the relationship between that same asset and many common risk factors

this theory predicts a relationship between the returns of a portfolio and the returns of a single asset through a linear combination of many independent macro-economic variables.  

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