A financial theory posited as a testable, and more flexible, alternative to the CAPITAL ASSET PRICING MODEL (CAPM), based on the concept that multiple linear RISK factors influence the return of a security, and the factors can be estimated through principal components/factor analysis. By understanding the risk and return contribution of each factor, an optimal portfolio can be created. APT, like CAPM, makes use of BETA as a measure of risk. The singlefactor APT return is given by: where E(rj) is the expected return of security j, E(rf) is the expected RISKFREE RATE, 1 is the slope of risk factor 1, and 1 is the beta related to risk factor 1 and security j. The equation can be expanded to multifactor form, with z risk factors: Additional references: Roll (1977), Roll and Ross (1980), Ross (1976).

• ROME-SCOT, or ROME-PENNY
• RONALD COASE
• RONALD COASE
• ROOD OF LAND
• ROOM AND BOARD RATE
• ROOM ONLY RATE
• RO OPERE ET EABORE
• ROOT CAUSE FAILURE ANALYSIS
• ROOT DIRECTORY
• ROOT MEAN SQUARE
• ROOT OF DESCENT
• ROOT OF TITLE
• RORSCHACH TEST
• ROS
• ROSTER
• ROTABLE
• ROTABLE
• ROTATION
• ROTATION
• ROTHER-BEASTS
• ROTH IRA
• ROTTEN BOROUGHS
• ROTTEN CLAUSE
• ROTULUS WINTONIZE
• ROTURE