In a Simple CAPM World Which of the Following Statements

question 50

Multiple Choice

In a simple CAPM world which of the following statements is (are) correct?
I. All investors will choose to hold the market portfolio, which includes all risky assets in the world.
II. Investors' complete portfolio will vary depending on their risk aversion.
III. The return per unit of risk will be identical for all individual assets.
IV. The market portfolio will be on the efficient frontier, and it will be the optimal risky portfolio.

• A) I, II, and III only
• B) II, III, and IV only
• C) I, III, and IV only
• D) I, II, III, and IV

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Definitions:

Country-Of-Origin Effects

The beliefs and associations people in one country have about goods and services produced in another country.

Norms

Formal or informal societal rules that specify or prohibit certain behaviors in specific situations.

Selective Distortion

The process by which consumers interpret information in a biased way, often aligning it with their existing beliefs and perceptions.

Psychological Processes

Internal mental processes that influence understanding, decision-making, emotions, and overall psychological functioning.