The Research by Fama and French Suggesting That CAPM Is

question 25

Multiple Choice

The research by Fama and French suggesting that CAPM is invalid has generated which of the following responses?

• A) Better econometrics should be used in the test procedure.
• B) Estimates of asset betas need to be improved.
• C) Theoretical sources and implications of research that contradicts CAPM needs to be reconsidered.
• D) The single-index model needs to account for nontraded assets and the cyclical behavior of asset betas.
• E) All of the options are correct.

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