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1. Describe the Capital Asset Pricing Model (CAPM) and the Arbitrage Pricing Theory (APT) including its assumptions, features and empirical applications. How does the

1. Describe the Capital Asset Pricing Model (CAPM) and the Arbitrage Pricing Theory (APT) including its assumptions, features and empirical applications. How does the Arbitrage Pricing Theory (APT) alleviate the problems that are raised by financial economists regarding the CAPM?

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