The Separation Theorem for the CAPM Includes

question 27

Multiple Choice

The separation theorem for the CAPM includes

• A) each investor must separate his desired return from his risk.
• B) every investor will invest in the same risky portfolio.
• C) each investor's indifference curve will determine his risk portfolio.
• D) security risk is considered before returns are analyzed.

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Definitions:

Callous

Exhibiting or having an insensitive and cruel disregard for others.

Unconcerned

Not worried, interested, or engaged; indifferent.

Evolutionary Perspective

A theoretical approach that explains human behavior and mental processes through the lens of adaptation and natural selection.

Prosocial Behaviour

Refers to voluntary actions intended to help or benefit another individual or group of individuals without expecting reward.