Which of the Following Is not an Assumption of the Capital

question 44

Multiple Choice

Which of the following is not an assumption of the Capital Market Theory?

• A) All investors are Markowitz efficient investors.
• B) All investors have homogeneous expectations.
• C) There are no taxes or transaction costs in buying or selling assets.
• D) All investments are indivisible so it is impossible to buy or sell fractional shares.
• E) All investors have the same one period time horizon.

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Definitions:

Stabilizing Selection

Natural selection acting to promote stability rather than change in a population's gene pool.

Geographical Changes

Alterations in the earth's surface, including changes in landscapes, climate, and natural environments.

Anagenesis

A sustained directional shift in a population's average characteristics.

Cladogenesis

A process in evolutionary biology where a species splits into two distinct species, rather than evolving as a single lineage, leading to increased biodiversity.