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:

Negative

Characterized by the absence rather than the presence of a certain quality, or expressing or containing a denial or refusal.

Positive

Defined by having certain features or qualities, rather than lacking them.

Choices

The act of selecting between two or more possibilities.

Happiness

An emotional or mental state characterized by feelings ranging from contentment to intense joy, reflecting a positive emotional condition.