APT

APT is used to determine the intercept of Multifactor model, How ? they are totally separate model?

Please add some comments

This is only true for the macroeconomic model where the intercept is the asset’s expected return. That asset expected return can be found using the APT model (remember the intercept there is the risk free rate). Think of it as a two-step process.

Macroeconomic model tells you the return due to the ‘shocks’ in macroeconomic factors. If all the macro factors are as expected i.e. there are no shocks, the return on the asset would be the intercept which is the expected return on the asset. This expected return has to be determined using APT.