Concept
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Arbitrage Pricing Theory
![Expected Returns Under APT](../../../../../../figures.boundless-cdn.com/18469/full/7872bdeeeaf1cf049b5c0aba06.jpg)
Expected Returns Under APT
APT can also be expressed in terms of expected returns where RP is the risk premium of the factor, and rf is the risk-free rate.
Source
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"Arbitrage pricing theory."
http://en.wikipedia.org/wiki/Arbitrage_pricing_theory
Wikipedia
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