Multiple Beta Model
The arbitrage pricing theory (APT) has multiple betas in its model. In contrast to the CAPM that has only one risk factor, namely the overall market, APT has multiple risk factors. Each risk factor has a corresponding beta indicating the responsiveness of the asset being priced to that risk factor.
Multiple-factor models contradict CAPM by claiming that some other factors can influence return, therefore one may find two stocks (or funds) with equal beta, but one may be a better investment.
Read more about this topic: Beta (finance)
Famous quotes containing the words multiple and/or model:
“Creativity seems to emerge from multiple experiences, coupled with a well-supported development of personal resources, including a sense of freedom to venture beyond the known.”
—Loris Malaguzzi (20th century)
“When Titian was mixing brown madder,
His model was posed up a ladder.
Said Titian, “That position
Calls for coition,”
So he lept up the ladder and had her.”
—Anonymous.