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7. APT replaced CAPM as the main asset pricing model because: a. Its assumptions are more realistic. b. APT is a generalised version of CAPM.

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7. APT replaced CAPM as the main asset pricing model because: a. Its assumptions are more realistic. b. APT is a generalised version of CAPM. C. It is easier to identify the factors driving asset returns with APT than with CAPM. d. CAPM's validity as a theoretical model was questioned by research evidence. (5 marks) lih cBook Air

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