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Management · Q710

Financial Management

Graduate and Post Graduate · Management · question 710

Q710

According to capital asset pricing model assumptions, investors will borrow unlimited amount of capital at any given

A.
identical and fixed returns
B.
risk free rate of interest
Answer
C.
fixed rate of interest
D.
risk free expected return

Answer: Option B

Solution

Answer: Option B
Solution:
According to capital asset pricing model assumptions, investors will borrow unlimited amount of capital at any given risk free rate of interest. The risk-free interest rate is the rate of return of a hypothetical investment with no risk of financial loss, over a given period of time.