What pricing model asserts that asset returns are determined by multiple macroeconomic risk factors rather than just market risk alone?

Explanation

• Arbitrage Pricing Theory (APT), proposed by Stephen Ross, is a multi-factor asset pricing model predicting returns based on multiple systematic risk variables (e.g., inflation, interest rates, GDP growth).
• CAPM uses only a single risk factor (market systematic risk Beta).
• APT does not require strong market portfolio assumptions mandated by traditional CAPM.