One Limitation on Factor Models Is the Problem That a Good

Multiple Choice

One limitation on factor models is the problem that a good factor model in one period

A) may not be a good factor model in equilibrium
B) may be a good factor model when factors are numerous
C) may be not be appropriate for stock return series where price series do not follow a random walk
D) may not be a good in another period when conditions such as oil prices change due to economic innovations