Question #4: (10 points) A- The scientific method of inquiry, as the name suggests, was developed for the natural and physical sciences and not specifically for social sciences such as accounting. There are some clear limitations on the application of this research methodology to accounting. What are the main limitations? (4 points) . . B- The CAPM model presents how users react to accounting information and illustrates how risk is incorporated into the decision models. (6 points) 1 (Explain the relationship of beta to stock prices ? ( 1 point-1 2. Present the CAPM model? What each of its components denotes? (2 points) 3- What is the basic assumption for the CAPM? (1 point) CAPM 4-What are the main critics to CAPM, so as it is not relevant for accounting theory development? (1 point) CAPM 4