Financial Risk Manager Part 1
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A risk consultant is advising a pension fund to revise its asset allocation approach to be more consistent with the theory of CAPM. The consultant prepares a list of the assumptions of CAPM to support the advice. Which of the following is an assumption of CAPM?
A risk consultant is advising a pension fund to revise its asset allocation approach to be more consistent with the theory of CAPM. The consultant prepares a list of the assumptions of CAPM to support the advice. Which of the following is an assumption of CAPM?
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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.
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