The CAPM Does Not Require Investors Have Homogeneous Expectations,but Rather

question 72

Multiple Choice

The CAPM does not require investors have homogeneous expectations,but rather that they have:

• A)rational biases.
• B)no biases.
• C)heterogenous expectations.
• D)rational expectations.

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Definitions:

Rewards

Incentives or benefits given in response to an action or behavior, intended to reinforce or increase the likelihood of that behavior.

Productivity

The efficiency at which goods or services are produced, often measured as the amount of output per unit of input (like labor, time, or materials).

Passive

A state or quality of acceptance or submission without active response or resistance.

Self-confidence

A person's belief in their own abilities, qualities, and judgment, fostering a positive view of oneself.