All of the Following Are Basic Assumptions of the CAPM

question 51

Multiple Choice

All of the following are basic assumptions of the CAPM except:

• A) Investors are risk-averse
• B) Investors want to maximize their returns
• C) Investors optimize their portfolios by avoiding risky assets
• D) Investors use diversification

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Definitions:

Eustress

Positive stress which results from motivating challenges and leads to improved performance.

Distress

The negative consequences and components of stress.

Role Conflict Stress

The stress experienced by an individual when facing incompatible demands or expectations from multiple roles they play in their life or profession.

Effectiveness

A measure of how well a particular method or process achieves its objectives.