Coursera Spring Sale
40% Off Coursera Plus Annual!
Grab it
Learn the Arbitrage Pricing Theory (APT) and multifactor models essential for FRM Part 1 certification in this 45-minute video lesson. Explore APT's core assumptions and discover how it compares to the Capital Asset Pricing Model (CAPM). Master the inputs required for multifactor models, including factor betas, while understanding the practical challenges these models present in hedging strategies. Calculate expected asset returns using both single-factor and multifactor approaches, and develop skills to construct portfolios that effectively hedge exposure to multiple risk factors. Apply the renowned Fama-French three-factor model to estimate asset returns in real-world scenarios. This comprehensive lesson covers Chapter 6 of Book 1 in the 2025 FRM Part 1 curriculum, providing the theoretical foundation and practical applications needed to excel in risk management and asset pricing.
