Which of the Following Are Assumptions of the Simple CAPM

question 15

Multiple Choice

Which of the following are assumptions of the simple CAPM model?
I. Individual trades of investors do not affect a share's price
II. All investors plan for one identical holding period
III. All investors analyse securities in the same way and share the same economic view of the world
IV. All investors have the same level of risk aversion

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

---

Definitions:

Variables

Elements or factors that can vary or change within a study, potentially influencing the research outcome.

Authority

A way of knowing based on knowledge from a credible or respected source of information.

Intuition

Refers to arriving at an answer without quite knowing how one arrived there; a hunch or “gut instinct.”

Nomothetic

A research approach with an emphasis on measurement with a view to making generalizations about human behavior.