Arbitrage Pricing Theory and its relevance in modelling market

This research compares the Arbitrage Pricing Theory (APT) to Capital Asset (CAPT) by looking at numerous macroeconomic factors that affect market security prices and determining how APT explains majority of returns. The goal this study was look fundamental aspects (revenue, assets, liabilities, growth potentials) in order compute intrinsic value based on investor's risk tolerance. BSE NSE websites were used get month-by-month secondary data over a period ten years (2010–2020), which included share price returns TATA Motors Eicher as well Auto Index. statistics GDP rate, inflation, interest rates obtained from RBI's official website. findings imply model accurately describes company's Furthermore, it is clear variables have substantial impact an asset time are one key inputs financial analysts must consider when calculating expected sources incorporated set inform investor why certain stocks move particular direction.