Which of the Following Is not an Assumption of the Capital

question 44

Multiple Choice

Which of the following is not an assumption of the Capital Market Theory?

• A) All investors are Markowitz efficient investors.
• B) All investors have homogeneous expectations.
• C) There are no taxes or transaction costs in buying or selling assets.
• D) All investments are indivisible so it is impossible to buy or sell fractional shares.
• E) All investors have the same one period time horizon.

---

Definitions:

Essential Ingredient

A critical or necessary component required for a process or outcome to be successful or complete.

Influence

The capacity to have an effect on the character, development, or behavior of someone or something, or the effect itself.

Intelligence

The ability to learn, understand, and apply knowledge and skills, and to adapt effectively to new situations.

Ancient Greeks

Refers to the people and civilizations of Greece in classical times, known for their contributions to philosophy, democracy, and arts.