Which of the Following Are Assumptions of the Capital Asset

question 9

Multiple Choice

Which of the following are assumptions of the capital asset pricing model?

• A)Funds can be borrowed or lent in unlimited quantities at risk-free rate
• B)The objective of all investors is to maximize their expected utility over the same one-period time frame using the same basis for evaluating investments
• C)There are not taxes or transaction costs associated with any investment
• D)All of the above are correct assumptions

---

Definitions:

Transactional Analysis

A psychoanalytic theory and method of therapy wherein social transactions are analyzed to determine the ego state of the communicator as a basis for understanding behavior.

Encounter

A meeting or interaction between individuals, which can lead to an exchange of ideas or affect personal growth.

Payoff

The return or reward received as a result of an investment or action.

Self-Awareness

The conscious knowledge of one's own character, feelings, motives, and desires, being aware of oneself as an individual.