In more recent empirical tests of the capital asset pricing model, additional independent variables were included in tests that, in theory, should not influence an asset’s return. Which of the following ratios did not demonstrate explanatory power for asset returns during these recent tests?
　　A. all of these ratios demonstrated explanatory power.
　　B. earnings-to-price (E/P).
　　C. debt-to-equity (D/E).
　　D. book-to-market (B/M).
　　Answer:A
　　The more recent empirical tests beginning in the late 1970s took a different approach. These models included additional independent variables that, in theory, should not systematically influence an asset’s return. However, repeated tests identified factors such as earnings-to-price (E/P), debt-to-equity (D/E), and book-to-market (B/M) ratios that demonstrate explanatory power.