Use the Table for the Question(s) Below

question 28

Multiple Choice

Use the table for the question(s) below.
Consider the following stock price and shares outstanding data:
-Which of the following is NOT an assumption used in deriving the Capital Asset Pricing Model (CAPM) ?

• A) Investors have homogeneous expectations regarding the volatilities, correlation, and expected returns of securities.
• B) Investors have homogeneous risk adverse preferences toward taking on risk.
• C) Investors hold only efficient portfolios of traded securities; that is, portfolios that yield the maximum expected return for the given level of volatility.
• D) Investors can buy and sell all securities at competitive market prices without incurring taxes or transactions costs and can borrow and lend at the risk-free interest rate.