Which of the Following Is Not an Assumption of Both

question 68

Multiple Choice

Which of the following is not an assumption of both the arbitrage pricing theory (APT) and the CAPM?

• A) Investors have homogeneous beliefs.
• B) Investors are risk-averse utility maximizers.
• C) Borrowing and lending can be done at the rate RF.
• D) Markets are perfect.

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Definitions:

Mass Movements

Large groups of people engaging collectively in political, social, or cultural campaigns to bring about or resist change in society.

Offers of Reforms

Proposals or pledges to make changes or improvements, typically in political, social, or economic systems.

Compounded Semiannually

Interest on an investment that is calculated twice a year and added to the principal sum.

Initial Deposit

The first sum of money placed into an account or investment, serving as the starting balance.