In a Simple CAPM World Which of the Following Statements

question 50

Multiple Choice

In a simple CAPM world which of the following statements is (are) correct?
I. All investors will choose to hold the market portfolio, which includes all risky assets in the world.
II. Investors' complete portfolio will vary depending on their risk aversion.
III. The return per unit of risk will be identical for all individual assets.
IV. The market portfolio will be on the efficient frontier, and it will be the optimal risky portfolio.

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

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Definitions:

Big Five Trait

Components of the Big Five personality model, representing five domains that describe human personality at a broad level.

Immoderation

The action or habit of not restraining oneself from indulgence in activities, often leading to excess or extreme behavior.

Anger

A strong feeling of annoyance, displeasure, or hostility triggered by what is perceived as wrong or injustice.

Big Five Trait

A framework outlining five extensive traits that characterize human personality: openness to experience, conscientiousness, extraversion, agreeableness, and neuroticism.