The following is an except form the article risk and Reward published by the Economist of October 20, 1990:

Is the CAPM supported by the facts? That is controversial, to put it mildly. It is a tribute to Mr. Sharpe (co-winner of the 1990Nobel Prize in Economics) that his work, which dates from the early 1960s is till argued over so heatedly. Attention has lately turned away from beta to more complicated ways of carving up risk. But the significance of CAPM for financial economics would be hard to exaggerate.

a. What are the general conclusions of studies that empirically investigate the CAPM?

b. Summarize Rolls argument on the problems inherent in the empirically verifying the CAPM.

c. What are the advantage of the APT model relative to the CAPM?

d. Explain the Fama-French factor model.