The Most Serious Drawback of the Arbitrage Pricing Model Is

question 105

Multiple Choice

The most serious drawback of the arbitrage pricing model is

• A) the requirement of a negative market risk premium.
• B) its inability of identifying important factors.
• C) its reliance on a market index.
• D) the disequilibrium assumption.
• E) none of the above

---

Definitions:

Suppression

The deliberate, conscious act of stopping oneself from thinking or feeling certain emotions.

Enhancement

The process of improving or amplifying the quality, value, or extent of something.

Brain Functioning

The activities and processes that occur within the brain to support mental and physiological activities, including thought, emotion, and movement.

Memory Errors

Mistakes or inaccuracies in recalling information or events, often due to factors like interference, misconceptions, or gaps in memory consolidation.