What is Arbitrage Pricing Theory
What is Arbitrage Pricing Theory?
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In 1976, the Arbitrage Pricing Theory (APT) of Stephen Ross represents the returns on individual assets like a linear combination of many random factors. These random factors can be statistical factors or fundamental. When to be no arbitrage opportunities there should be restrictions on the investment processes.
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Illustrates the term serial autocorrelation?
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What is the weight in the weighted average cost of capital?
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Illustrates an example of real probabilities to price derivatives?
Rs. Sales 2,40,000 Variable costs 1,44,000 Fixed costs 26,000 Profit before tax 70,000 Rate of tax 40% Firm is proposing to buy the new plant that could generate extra annual profit of Rs. 10,000. The fixed cost of new plant is expected to Rs. 4000. New plant would increase sales volume by Rs. 40,00
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