Publication | Closed Access
New Tests of the APT and Their Implications
79
Citations
6
References
1985
Year
Software MaintenanceEmpirical FinanceEngineeringNew TestsSoftware EngineeringSoftware AnalysisProgram EvaluationAsset PricingLanguage TestingArbitrage Pricing TheoryEconomic AnalysisTestabilityOption PricingEconomicsTesting TechniqueDerivative PricingApt ModelFinanceFinancial EconomicsProgram AnalysisSoftware TestingBusinessTest Evolution
ABSTRACT This paper provides new tests of the arbitrage pricing theory (APT). Test results appear to be extremely sensitive to the number of securities used in the two stages of the tests of the APT model. New tests also indicate that unique risk is fully as important as common risk. While these tests have serious limitations, they are inconsistent with the APT.
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