The general arbitrage pricing theory (APT) differs from the single-factor capital asset pricing model (CAPM) because it:

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The general arbitrage pricing theory (APT) differs from the single-factor capital asset pricing model (CAPM) because it:

a. Places more emphasis on market risk.

b. Minimizes the importance of diversification.

c. Recognizes multiple unsystematic risk factors.

d. Recognizes multiple systematic risk factors.

 P-69

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ISE Investments

ISBN: 9781266085963

13th International Edition

Authors: Zvi Bodie, Alex Kane, Alan Marcus

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