3. Which of the following is a weakness of the CAPM? A. Since it has only one regression variable, CAPM does not have strong explanatory power. B. The slope is measured by beta which itself is an imperfect risk measure. C. CAPM only works when markets are perfectly efficient which is not practical in reality. D. CAPM is a linear expression of risk when in reality, risk is probably nonlinear especially when you consider behavioral finance. E. All or none of the above are correct. 4. Which of the following is correct about the CAPM? A. It is a model that calculates the dollar price of a capital asset. B. It provides a minimum required rate of return on a company's total assets. C. It is a percentage that accounts for a capital asset's total risk. D. It is the formulaic expression of the security market line whose slope is beta E. More than one of the above 5. Which of the following is false about the Beta Coefficient in the CAPM? A. It relies partially on standard deviation which is often imperfect due to skew or kurtosis. B. It is not bounded by (1) and 1 . C. It is calculated using past data but the past doesn't necessarily repeat. D. It requires an entire asset's category to be completely measured which is impossible. E. It can be reduced by diversification as long as the assets are not perfectly positively correlated