Arbitrage Pricing Theory (APT) is a model proposed by Stephen Ross in 1976 for calculating returns on securities. It assumes multiple factors affecting security returns, differing from the Capital Asset Pricing Model (CAPM), which relies on a single systematic risk factor.
The Federal Reserve Board (FRB) is the governing body of the Federal Reserve System, responsible for setting key policies, including reserve requirements, bank regulations, and discount rates.
Linear interpolation is a technique used to estimate an unknown value that falls within two known values in a linear relationship. This method is essential in fields like finance, particularly for calculating the internal rate of return (IRR).
Windfall gains and losses refer to unexpected increases or decreases in value arising from actual or prospective receipts that differ from initial predictions or due to changes in net present value of the receipts.
