All of the Following Are Assumptions of the Capital Asset

question 106

Multiple Choice

All of the following are assumptions of the Capital Asset Pricing Model (CAPM) except

• A) Investors can borrow and lend any amount at the risk-free rate.
• B) Investors all have homogeneous expectations regarding expected returns.
• C) Investors can have different time horizons, daily, weekly, annual, or some other period.
• D) All investments are infinitely divisible.
• E) Capital markets are in equilibrium.

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Definitions:

Dimensions

in the context of behavior, refers to the measurable attributes of actions, such as frequency, intensity, and duration.

Types of Attributions

These are explanations for behaviors or events, often categorized as internal (personal) or external (situational) attributions.

Expectancy

In psychology, the anticipation or belief regarding the likelihood that a particular behavior will lead to a specific outcome, heavily influencing motivations and actions.

Types of Expectancies

Different forms of anticipation or belief about what may happen in the future, often based on past experiences or social cues.