Even Though Many of the CAPM Assumptions Are Violated in the Real

question 13

Multiple Choice

Even though many of the CAPM assumptions are violated in the real world which of the following provides a reason to use the model in investment decisions?

• A) the efficient set must be the same for all investors
• B) the amount of risk free lending or borrowing undertaken will be the same
• C) every investor has the same expectations with regards to expected returns and risks for available securities
• D) everyone faces the same risk free rate

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