All of the Following Are Assumptions of the Capital Asset

question 106

Multiple Choice

All of the following are assumptions of the Capital Asset Pricing Model (CAPM) except

• A) Investors can borrow and lend any amount at the risk-free rate.
• B) Investors all have homogeneous expectations regarding expected returns.
• C) Investors can have different time horizons, daily, weekly, annual, or some other period.
• D) All investments are infinitely divisible.
• E) Capital markets are in equilibrium.

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Definitions:

Immediate Gratification

The desire to experience pleasure or fulfillment without delay or deferment.

Millennials

The demographic cohort following Generation X, typically born between the early 1980s and mid-1990s to early 2000s.

Millennial Generation

A demographic cohort following Generation X, typically born between the early 1980s and mid-1990s, known for their comfort with technology and digital environments.

Video Games

Digital games that involve interaction with a user interface to generate visual feedback on a two- or three-dimensional video display device such as a TV screen or computer monitor.