Which of the Following Is Not One of the Underlying

question 9

Multiple Choice

Which of the following is not one of the underlying assumptions of the Capital Asset Pricing Model (CAPM) ?

• A)All investors hold well-diversified portfolios.
• B)We live in a world of perfect capital markets.
• C)All investors face the same, single-period, time horizon.
• D)All of the above are assumptions underlying CAPM.

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Definitions:

Indifferent

Having no particular interest or sympathy; unconcerned or showing a lack of preference between two or more possibilities.

External Events

Occurrences outside of an individual's or organization's control that can have significant impacts on their actions, decisions, or performance.

Stoic

Pertaining to Stoicism, an ancient Greek philosophy that teaches virtue, wisdom, and endurance as the means to a tranquil and virtuous life.

Stoicism

Stoicism is an ancient philosophy that teaches the development of self-control and fortitude as a means of overcoming destructive emotions.