Which of the Following Is NOT an Implication Resulting from the Assumption

question 95

Multiple Choice

Which of the following is NOT an implication resulting from the assumption that capital markets are in equilibrium?

• A)All assets are assumed to be bought and sold at the equilibrium price established by supply and demand.
• B)All assets are not correctly priced to adequately compensate investors for the associated risks.
• C)The price for an overpriced asset would eventually fall to an equilibrium level so that the asset is held by all investors.
• D)The market portfolio will be the most efficient portfolio, with respect to the weights attached to the individual securities composing it.

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Definitions:

Perceived Importance

The value or significance that an individual assigns to a particular issue, concept, or object based on their perceptions.

Negotiating Skills

The set of abilities required to reach agreements or compromises between parties with differing interests.

Managers

Individuals who are responsible for planning, organizing, leading, and controlling the work of a team to achieve specific organizational goals.

Effective Negotiator

An individual who has the ability to successfully navigate negotiations by reaching agreements that benefit all parties involved through skills such as communication, persuasion, planning, and problem-solving.