We show the equivalence between the zero-beta version of a multi-factor arbitrage pricing model and a linear pricing model utilizing undiversified inefficient benchmarks in a given factor structure. The resulting linear model is a two-beta model, with one beta related to the inefficient...

<Para ID="Par1">This paper addresses a core issue for the regulated utility: what are the risks taken by investors in companies that supply a product whose supply is regulated? Prior research on returns of regulated water supply and distribution companies concluded that regulation interacts significantly with...</para>