Which of the Below Reasons Is NOT a Reason an APT

Multiple Choice

Which of the below reasons is NOT a reason an APT advocate would offer in support of the APT over either the CAPM or the multifactor CAPM?

A) The APT makes less restrictive assumptions about investor preferences toward risk and return.
B) The APT assumes that the investors trade off between risk and return depends solely on the basis of the expected returns and standard deviations of prospective investments.
C) The APT does not rely on identifying the true market index, the theory is potentially testable.
D) The APT makes no assumptions are made about the distribution of security returns.