Which of the Following Statements Does $\underline{not}$ Apply to the Market Model?
A)It Is a Simpler Approach

question 42

Multiple Choice

Which of the following statements does $\underline{not}$ apply to the market model?

• A)It is a simpler approach than the standard version of the capital asset pricing model.
• B)This approach is seldom used in accounting research.
• C)In this model, the risk-free return is dropped from the equation.
• D)Abnormal returns are captured in the error term of the model.

---

Definitions:

Randomly Assign

A method used in experimental designs where participants are allocated to different groups without any systematic criteria, helping to minimize bias.

Experimental Group

In research, the group of subjects who are exposed to the variable under investigation, in contrast to the control group.

Independent Variable

In experimental research, the variable that is intentionally manipulated by the researcher to explore its effect on a dependent variable.

Manipulation

The skillful or devious exertion of influence over someone for personal gain or to serve one's purposes.