Arbitrage Pricing Theory is based on the assumption that:

CS Executive · Corporate and Management Accounting · PYQS · December 2023
Arbitrage Pricing Theory is based on the assumption that:
(A) Intention of all market participants is wealth maximisation
(B) Market participants will bring back market equilibrium
(C) There are transaction costs
(D) Short-selling is not possible

Answer & Explanation:

Correct Answer: Option (B)

Official answer key: (B).

Topics: Financial Management

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