Which of the Following Statements Is Not True Regarding the CAPM

question 39

Multiple Choice

Which of the following statements is not true regarding the CAPM?

• A)If a share's expected return is 2% and the expected return on the market portfolio is 11%,the share's beta must be negative.
• B)In equilibrium,all risky assets are priced such that their expected return lies on the security market line.
• C)Investors do not differ in their attitudes towards risk.
• D)A and B
• E)A and C

---

Definitions:

Intellectual Development

The process of developing mental capabilities and processing skills such as reasoning, problem-solving, and understanding concepts.

Experiments

Scientific procedures undertaken to make a discovery, test a hypothesis, or demonstrate a known fact.

Illusory Correlation

The perception of a relationship between two variables when no such relationship actually exists.

Test Grades

Scores or marks given to evaluate the performance of students in examinations.