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In recommending that a retirement fund modify its investment distribution strategy in accordance with the Capital Asset Pricing Model (CAPM), a risk expert aims to better align the fund's strategies with CAPM principles. To support this recommendation, the expert compiles a list of the foundational assumptions underlying the CAPM. Which of the following options correctly identifies a fundamental assumption of the Capital Asset Pricing Model?
A
There are transaction costs associated with buying and selling assets.
B
An individual investor can affect the price of a stock by buying or selling that stock.
C
Investors make their investment decisions by taking into account their personal income taxes.
D
Investors have the same expectations regarding the expected returns and the variance of returns of all assets.