What does arbitrage pricing theory mean?
Definitions for arbitrage pricing theory
ar·bi·trage pric·ing the·o·ry
This dictionary definitions page includes all the possible meanings, example usage and translations of the word arbitrage pricing theory.
Wiktionary
arbitrage pricing theorynoun
A theory of asset pricing serving as a framework for the arbitrage pricing model.
Wikidata
Arbitrage pricing theory
In finance, arbitrage pricing theory is a general theory of asset pricing that holds that the expected return of a financial asset can be modeled as a linear function of various macro-economic factors or theoretical market indices, where sensitivity to changes in each factor is represented by a factor-specific beta coefficient. The model-derived rate of return will then be used to price the asset correctly - the asset price should equal the expected end of period price discounted at the rate implied by the model. If the price diverges, arbitrage should bring it back into line. The theory was proposed by the economist Stephen Ross in 1976.
Numerology
Chaldean Numerology
The numerical value of arbitrage pricing theory in Chaldean Numerology is: 5
Pythagorean Numerology
The numerical value of arbitrage pricing theory in Pythagorean Numerology is: 5
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"arbitrage pricing theory." Definitions.net. STANDS4 LLC, 2024. Web. 19 Apr. 2024. <https://www.definitions.net/definition/arbitrage+pricing+theory>.
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