The Key Assumption of the Capital Asset Pricing Model Is

question 61

Multiple Choice

The key assumption of the capital asset pricing model is that an investor cares only about his portfolio's

• A) degree of diversification.
• B) expected income.
• C) level of risk.
• D) expected return and standard deviation.

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Definitions:

Rutherford

Refers to Ernest Rutherford, the scientist who proposed the model of the atom with a central nucleus surrounded by electrons.

Alpha Particles

A type of ionizing radiation consisting of two protons and two neutrons, emitted from the nucleus of an atom.

Gold Foil

Thin sheets of gold used in scientific experiments, most famously in Rutherford's gold foil experiment which led to the discovery of the nucleus.

Sub-Atomic Particle

Particles smaller than atoms, including protons, neutrons, and electrons.