A Common Criticism of the CAPM Is That It

question 50

Multiple Choice

A common criticism of the CAPM is that it

• A)ignores the return on the market portfolio.
• B)uses too many factors.
• C)requires only a single measure of systematic risk.
• D)ignores the risk-free rate of return.

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Definitions:

Claudication

Pain caused by too little blood flow, usually during exercise, typically felt in the legs.

Aneurysm

An abnormal bulge in the wall of a blood vessel, usually an artery, which can lead to the risk of rupture.

Claudication

Pain and cramping in the lower leg due to inadequate blood flow to the muscles, often associated with peripheral artery disease.

Infarction

The death of tissue due to a lack of blood supply, often resulting from a blockage in the vasculature serving the affected area.