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The straightforward generalization of the simple Capital Asset Pricing Model (CAPM) to international stocks is problematic because A. inflation risk perceptions by different investors in
The straightforward generalization of the simple Capital Asset Pricing Model (CAPM) to international stocks is problematic because A. inflation risk perceptions by different investors in different countries will differ as consumption baskets differ B. investors in different countries view exchange rate risk from the perspective of different domestic currencies C. taxes, transaction costs and capital barriers across countries make it difficult for an investor to hold a world index portfolio D. All of these are correct E. None of these is correct. a
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