Which of the Following Are Assumptions of the Simple CAPM

question 19

Multiple Choice

Which of the following are assumptions of the simple CAPM model?
I. Individual trades of investors do not affect a stock's price.
II. All investors plan for one identical holding period.
III. All investors analyze securities in the same way and share the same economic view of the world.
IV. All investors have the same level of risk aversion.

• A) I, II, and IV only
• B) I, II, and III only
• C) II, III, and IV only
• D) I, II, III, and IV

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Definitions:

Oxidation

Oxidation is a chemical reaction involving the loss of electrons by an atom, molecule, or ion.

Oxidation Number

A number assigned to an element in chemical combination which represents the number of electrons lost or gained by an atom of that element in the compound.

Compound

A substance made up of atoms of two or more different elements chemically bonded together.

Oxidation Number

A number that represents the total number of electrons an atom either gains or loses in order to form a chemical bond with another atom.