Does CAPM model make sense for trading systems in the Forex market?

With this question I want to initiate series of reflections about the construction of a separate, not discussed here before, methodology of the speculations on derivatives. The practical realization of this idea, which I will develop in subsequent posts, will be carried out using the methods and achievements of the modern theory of portfolio selection. One of the concepts operating within it is known as CAPM, i.e. Capital Asset Pricing Model. The model mentioned here was originally formulated for equity portfolios, and naturally is followed by the idea - good or bad - to transplant its prey on the ground of derivative instruments, including Forex.

Any idea can be looked at in two ways - either enthusiastically or critically. This first look is the prerogative of the creator, but it happens that from the beginning he is skeptical of his work. However, there is no shortage of criticism against both the CAPM model and its use in the derivatives market. Recently, searching text resources devoted to the construction of intelligent trading strategies, I came across a very interesting post. On the other hand, not so long ago, I heard from fellow investor, who is operating on the basis of fundamental analysis methods (and I can go ahead and call him an expert in his field of action) that CAPM pricing model does not appeal to him. Almost verbatim quoting his words: "it is somehow vague and fuzzy."

The fuzzy systems - but understood very differently, because in terms of a formal Fuzzy Logic methodology - we'll be discussing with completely different occasions. But now, in order to advertise the issue, I will write just a handful of questions related to CAPM+Forex topic, which I hurled myself into the mouth.

1. CAPM model applies to stock markets, where profit is achieved only as a result of an increase in stock prices. Can I move it to the derivatives market?
2. What is the equivalent of the market portfolio? For the case of equity portfolios generally used are appropriate indices. Is there a market index for Forex?
3. In this model, there is - as a parameter - the risk free rate of return. How do I specify it in the case of financial instruments of various nature and denominated in different currencies?

These questions are just the tip of the iceberg, what is the issue of the transfer of portfolio theory for the Forex market. I plan to drill down further into the icy rock. And because this is probably not the first approach to the subject, I await with curiosity voices in the discussion.