APT

(noun)

In finance, arbitrage pricing theory (APT) is a general theory of asset pricing that holds, which holds that the expected return of a financial asset can be modeled as a linear function of various macro-economic factors or theoretical market indices, where sensitivity to changes in each factor is represented by a factor-specific beta coefficient.

Related Terms

Examples of APT in the following topics:

  • Arbitrage Pricing Theory

    • The Arbitrage Pricing Theory (APT) is a linear relationship between systemic factors and the return of an asset.
    • Arbitrage Pricing Theory (APT) is a model for asset pricing that was proposed by Stephen Ross in 1976.
    • The expected return of asset j under APT can be expressed in the following form:
    • Unlike CAPM, however, APT allows for there to be multiple factors that explain the return .
    • Naturally, this means that there are limits to how accurate APT is in the real world, but APT is still used as the basis for many of the commercial risk systems employed by asset managers.

  • Alliteration

    • When your speech is more engaging, your audience is more apt to pay attention and remain engaged with your words.

  • Getting over the hurdle

    • Although cooperative networks are not infallible, businesses that cooperate are more apt to satisfy social and entrepreneurial objectives, avoid ethical and legal lapses, and, in general, be more economically vigorous and competitive, especially against larger rivals.

  • Effects of Group Size on Attitude and Behavior

    • As an organization or community grows in size it is apt to experience tipping points where the way it operates needs to change.

  • Culture-Specific Nuances of Decision-Making

    • Peer Pressure - While this is a common term in other contexts, in this context the idea of peer pressure refers to collectivist cultures, who are more apt to align their actions and decisions with that of the society at large.

  • Do What to Make Friends?

    • In other words, a few brilliant folks or a few dim bulbs aren't apt to swing things one way or another.
    • Early-morning committee meetings, rather than displaying insight and freshness, are according to this point apt to be the day's least intelligent.

  • Sources of Information

    • Articles which deal in depth with specific studies, as a specialized article on science, are apt to be of more value than general articles which only tangentially deal with a topic.

  • The Working Woman

    • The aptness of the motto is evident in the diverse interests of GFWC members, who have implemented a broad range of programs and projects tailored to meet the needs of their communities.

  • Advantages and Disadvantages of Sexual Reproduction

    • This is an apt description of co-evolution between competing species.

  • Public and Private Bureaucracies

    • Berle argued that the unaccountable directors of companies were therefore apt to funnel the fruits of enterprise profits into their own pockets, as well as manage in their own interests.