Category: where
E(r) = ²1 x E (r1) + ²2 x E (r2) +&&& + ²n x E (rn)
it has named as the APT (Arbitrage Pricing Theory). Considering the investors preferences assumptions of this model is highly focused on expected returns equilibrium theory for the securities and this is the prime assumption of this theory (Brealey & Myers 2003