Which of the following is an important problem with our reliance on betas and CAPM for capital budgeting purposes?
1) Neither beta nor CAPM appear to capture any information related to actual stock or market returns.
2) Betas and CAPM are not widely accepted in the field of finance.
3) Betas and CAPM are only applicable to large corporations.
4) Betas and CAPM do not consider the risk-free rate of return.