Practice mode Finance

Under the assumptions of the capital asset pricing model, how do investors view the variances, expected returns and covariances of all assets?

Correct answer D. Identical

Explanation

CAPM assumes homogeneous expectations, meaning all investors hold identical estimates of expected returns, variances and covariances.

Report a problem

Answer checked How we write and check questions

Tip: press A, B, C or D to answer, and N for the next question.

Advertisement

Have a question about this answer?

Your email address will not be published. Required fields are marked *

Links and website addresses are not allowed in comments.