Which of the following statements is incorrect regarding the Capital Asset Pricing Model (CAPM) or Multi-factor models such as the Fama and French's three factor model or the Arbitrage Pricing Theory (APT)? These models can be used to calculate the liquidity needs of an investor with long investment horizon and with low level of willingness to take risk but high level ability to take risk. These models are used to create portfolios with specific level(s) of factor risk for example creating portfolios with lower sensitivity to overall market movements, or portfolios with higher sensitivity to unanticipated change in inflation, or portfolio with lower sensitivity to small capitalised equities. These models can be enhanced to make improved predictions through adjusting the risk factor(s). These models are used to forecast the future returns of a market, sector/industry or a specific investment. These models either require that the markets are efficient to start with or that the markets will become efficient