CAPM and APT - I requirement a "dumbed down" explanation.?


I'm smart - I understand the math, and I know they are both around measuring and predicting how ably a stock follows the main open market - but I also know I'm missing something basic, especially almost CAPM. Can someone please recommend a website or an article that would help?

Finance - relinquish curve?

Answer:
CAPM is unsophisticatedly a two factor model - considering only the risk free interest rate and beta. The risk free rate is the return investor will attain for holding the security over a spell of time, while beta will determine the return for taking the risk.
For more clarity refer to this link: http://www.investopedia.com/terms/c/capm...
APT otherwise is not limited to the number of factor. You can build in as lots factors contained by the model you want. See for example, Fama and French Three Factor Model.



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