Arbitrage Pricing Theory Definition

noun

(finance) A theory of asset pricing serving as a framework for the arbitrage pricing model.

Wiktionary
Advertisement
other
A mathematical theory that attempts to determine the expected or required rates of return on risky assets based on the asset’s systemic relationship to more than one risk factor. The theory was developed by Stephen Ross in the early 1970s and was initially published in 1976. It assumes that capital markets are perfectly competitive and investors always prefer more wealth to less wealth, even if less wealth comes with more certainty. In contrast, another popular theory, the Capital Asset Pricing Model, focuses on a single risk factor.
Webster's New World Finance
Advertisement

Other Word Forms of Arbitrage Pricing Theory

Noun

Singular:
arbitrage pricing theory
Plural:
arbitrage-pricing-theories

Find Similar Words

Find similar words to arbitrage pricing theory using the buttons below.

Words Starting With

Words Ending With

Word Length