The straightforward generalization of the simple 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 investors to hold a world-index portfolio.
D. All of the options are correct. E. None of the options are correct.
All of the factors make a broad generalization of the CAPM to international stocks problematic.
D. All of the options are correct. E. None of the options are correct.
All of the factors make a broad generalization of the CAPM to international stocks problematic.
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