Complex statistical and mathematical theory is an approach, which is classified as
A
arbitrage pricing theory
B
arbitrage risk theory
C
arbitrage dividend theory
D
arbitrage market theory
Correct Answer: arbitrage pricing theory
Complex statistical and mathematical theory is an approach, which is classified as arbitrage pricing theory. Arbitrage pricing theory (APT) is a multi-factor asset pricing model based on the idea that an asset's returns can be predicted using the linear relationship between the asset’s expected return and a number of macroeconomic variables that capture systematic risk.