The CAPM Is Based on an Assumed Efficient Market in Which

question 72

True/False

The CAPM is based on an assumed efficient market in which there are many small investors, each having the same information and expectations with respect to securities; there are no restrictions on investment, no taxes, and no transactions costs; and all investors are rational, view securities similarly, and are risk-averse, preferring higher returns and lower risk.

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Definitions:

Geocentric

Geocentric pertains to considering Earth as the center, or in business, it represents a global approach where policies and practices are applied universally across a multinational company, disregarding national boundaries.

Human Resources

The department within an organization that is responsible for managing employee-related functions, such as hiring, training, and benefits.

Headquarters-Centered

A management approach or organizational structure in which decision-making authority, corporate culture, and major activities are centralized at the main office or headquarters.

Ethnocentric

A perspective that evaluates other cultures according to the standards of one's own culture, often regarding them as inferior.