“The arbitrage pricing theory (APT) and capital asset pricing model(CAPM) are two major influential theories on...

“The arbitrage pricing theory (APT) and capital asset pricing model(CAPM) are two major influential theories on asset pricing. The APT differs from CAPM in that it is less restrict vein its assumptions. It allows for an explanatory (as opposed to statistical ) model of asset returns.” In terms of this quote, compare and contrast APT to CAPM. Your discussion should explain the assumptions,criticisms and advantages of each model as well as some of the common risk-factors uses in each model.

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