▁in observ ability ▁of ▁the ▁true ▁market ▁port folio , ▁the ▁C AP M ▁might ▁not ▁be ▁empir ically ▁test able . ▁This ▁was ▁presented ▁in ▁greater ▁depth ▁in ▁a ▁paper ▁by ▁Richard ▁Roll ▁in ▁ 1 9 7 7 , ▁and ▁is ▁generally ▁referred ▁to ▁as ▁Roll ' s ▁critique . ▁However , ▁others ▁find ▁that ▁the ▁choice ▁of ▁market ▁port folio ▁may ▁not ▁be ▁that ▁important ▁for ▁empir ical ▁tests . ▁Other ▁authors ▁have ▁attempted ▁to ▁document ▁what ▁the ▁world ▁wealth ▁or ▁world ▁market ▁port folio ▁consists ▁of ▁and ▁what ▁its ▁returns ▁have ▁been . ▁▁ ▁The ▁model ▁assumes ▁economic ▁agents ▁optim ise ▁over ▁a ▁short - term ▁horizon , ▁and ▁in ▁fact ▁invest ors ▁with ▁longer - term ▁out look s ▁would ▁optim ally ▁choose ▁long - term ▁infl ation - link ed ▁b onds ▁instead ▁of ▁short - term ▁rates ▁as ▁this ▁would ▁be ▁more ▁risk - free ▁asset ▁to ▁such ▁an ▁agent . ▁ ▁The ▁model ▁assumes ▁just ▁two ▁dates , ▁so ▁that ▁there ▁is ▁no ▁opportunity ▁to ▁consume ▁and ▁re bal ance ▁port fol ios ▁repeatedly ▁over ▁time . ▁The ▁basic ▁ins ights ▁of ▁the ▁model ▁are ▁extended ▁and ▁generalized ▁in ▁the ▁inter tem por al ▁C AP M ▁( IC AP M ) ▁of ▁Robert ▁M erton , ▁and ▁the ▁consumption ▁C AP M ▁( CC AP M ) ▁of ▁Douglas ▁Bre eden ▁and ▁Mark ▁Rub in stein . ▁ ▁C AP M ▁assumes ▁that ▁all ▁active ▁and ▁potential ▁share hold ers ▁will ▁consider ▁all ▁of