which is better capm or apt

  • Thread starter Thread starter morganist
  • Start date Start date
Quote from nutmeg:

Zzzzzzz. I'm sorry couldn't help myself, my eyes glaze over.:D
More...

seriously i need an answer i am working on a new security and i need a way to summarize risk on an individual level to then relate it to pooled securities. thus i can work out the value in relation to other securities in the group.

so i need to know which is better. i am leaning towards a five factor model based on apt but want input.
 
Quote from morganist:

seriously i need an answer i am working on a new security and i need a way to summarize risk on an individual level to then relate it to pooled securities. thus i can work out the value in relation to other securities in the group.

so i need to know which is better. i am leaning towards a five factor model based on apt but want input.
More...

APT of course has a lot more flexibility. You can make APT replicate CAPM (just by using only a beta factor), so I say APT > CAPM.

Here is a good intro to it.

http://www.youtube.com/watch?v=-0EgQ97whWg
 
You must log in or register to reply here.
Back
Top