A criticism of the CAPM is that it:
A) ignores the return on the market portfolio.
B) ignores the risk-free return.
C) requires a single measure of systematic risk.
D) utilizes too many factors.

Question

Quizplus · Accepted Answer

CAPM (Capital Asset Pricing Model) is criticized for relying on a single measure of risk, beta, to describe the systematic risk of a portfolio or an asset, ignoring other potential factors that could affect an asset's return.

A Criticism of the CAPM Is That It