As best as I can figure out, Arbitrage Pricing Theory (or APT)
postulates the following: Assume a market with n stocks where the
closing prices on each trading day can be represented as n-dimensional
vectors.  APT (as I interpret it) says that each of these vectors can
be approximated by some linear combination of i n-dimensional basis
vectors; where i is the number of these mysterious basis vectors
needed to approximate the observed prices. Is the model I have
described APT or is it more properly called something else in economic
theory? (Or did I just now invent it? :)