- CFA Exams
- CFA Level I Exam
- Topic 9. Portfolio Management
- Learning Module 63. Portfolio Risk and Return: Part II
- Subject 3. The Capital Asset Pricing Model
CFA Practice Question
The CAPM assumes ______
II. investors make different investment decisions based on their different degrees of risk aversion and different expectations.
III. investors' valuations of assets are identical.
I. investors make rational decisions.
II. investors make different investment decisions based on their different degrees of risk aversion and different expectations.
III. investors' valuations of assets are identical.
A. I and II
B. I and III
C. II and III
Explanation: III. This is because they have homogeneous expectations or beliefs.
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