The Main Shortcoming of CAPM Is That It

question 38

Multiple Choice

The main shortcoming of CAPM is that it

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

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Definitions:

Fermentation

A metabolic process that produces chemical changes in organic substrates through the action of enzymes, converting sugar to acids, gases, or alcohol in the absence of oxygen.

Glycolysis

The metabolic pathway that breaks down glucose into pyruvate, producing energy in the form of ATP.

NAD+ Molecules

Nicotinamide adenine dinucleotide in its oxidized form, serving as an important coenzyme in redox reactions, carrying electrons from one reaction to another.

Anaerobic Conditions

Environments that lack oxygen, under which certain biological processes occur, such as the fermentation in yeasts.