I found conflicting pieces concerning whether APT was a special case of CAPM, and also the other way around. Any clarifiacation would be much appreciated.
Think about it…capm allows for no variation…there is one formula and that’s it. There are things like ICAPM that are basically completely new formulas that use similar names, but they’re not CAPM. APT allows for different risk factors…the market premium could be a risk factor or it could not be…it’s all up the analyst. Thus, CAPM is a special version of APT where there is only 1 risk factor and that risk factor is the market premium.