Which One of the Following Is NOT a Key Assumption

question 42

Multiple Choice

Which one of the following is NOT a key assumption underlying the CAPM?

• A) Investors prefer portfolios with lower standard deviations.
• B) Assets are infinitely divisible.
• C) Investors may borrow or lend at a single risk free interest rate.
• D) Taxes and transactions costs reduce market liquidity.

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Definitions:

Operational Definitions

Clearly stipulated definitions of terms or concepts used in research, ensuring clarity and consistency in interpretation and measurement.

Target Behavior

A specific behavior selected for change or intervention, often identified during behavioral assessments.

Fair Pair

A way to avoid symptom substitution or behavior covariation. The term fair pair refers to a maladaptive behavior intended to decrease and an incompatible, or competing, target behavior intended to increase in its place.

Behavior Observation

The systematic recording of observable behavior in its natural setting.