QUESTION
(i) Compare and contrast the Capital Asset Pricing Model (CAPM) with that of the Arbitrage Pricing Theory (APT)
(ii) Asset A has an expected return of 25% and the risk free rate is 5%. Find the expected return of asset B which has a level of systematic risk one and a quarter times that of asset A
(iii) Briefly explain how you would test for the APT model on the Stock Exchange of Mauritius