Discussion in 'Economics' started by morganist, Nov 28, 2009.
which is better capm or apt.
Zzzzzzz. I'm sorry couldn't help myself, my eyes glaze over.
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.
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.
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