The Straightforward Generalization of the Simple CAPM to International Stocks

Multiple Choice

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.