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The assumptions under the Arbitrage Pricing Theory are:

January 26, 2017
  1. A factor model describes asset returns.
  2. There are many assets, so investors can form well-diversified portfolios that eliminate asset-specific risk, not factor risk.
  3. No arbitrage opportunities exist among well-diversified portfolios.
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  1. Another CFA® Exam is Finished – Muskblog

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