Which of the following are assumptions of the capital asset pricing model?
A)Funds can be borrowed or lent in unlimited quantities at risk-free rate
B)The objective of all investors is to maximize their expected utility over the same one-period time frame using the same basis for evaluating investments
C)There are no taxes or transaction costs associated with any investment
D)All of the above are correct assumptions

Question

Quizplus · Accepted Answer

The following are assumptions of the capital asset pricing model: funds can be borrowed or lent in unlimited quantities at risk-free rate; the objective of all investors is to maximize their expected utility over the same one-period time frame, using the same basis for evaluating investments; and there are no taxes or transaction costs associated with any investment.

Which of the Following Are Assumptions of the Capital Asset