The Arbitrage Pricing Theory (APT) is an influential theory that focuses on the pricing of financial assets. Unlike the Capital Asset Pricing Model (CAPM), APT assumes that the price of an asset should be based on multiple risk factors and not just on market risks. The core of APT is that two identical assets cannot be priced differently; if this does happen, arbitrage will quickly eliminate the difference. This model offers an alternative framework for understanding pricing in financial markets.