The Arbitrage Pricing Theory (APT) is a multivariate asset pricing model for estimating the returns with the assumption that returns can be predicted through a relationship between the expected returns and risk factors from selected macroeconomic variables. Developed by an economist Stephen Ross in 1976, the APT is viewed as an improvement over the CAPM by incorporating multiple risk factors from the macro economy to estimate the systematic risk. Unlike the CAPM which assumes a perfect market, the APT assumes the market deviates from the fair market value and will correct itself eventually and as a result, arbitrageurs take advantage to profit from the deviation of securities from their fair market value. For arbitrageurs to profit by taking advantage of mispricing of securities, an estimate of the fair market value of the securities is required from valuators to inform the best trading positions to take. Business valuators estimate the fair market value of securities by applying market, income and assets methods of business valuation.