Q724
According to capital asset pricing model assumptions, variances, expected returns and covariance of all assets are
A.
identical
AnswerB.
not identical
C.
fixed
D.
variable
Answer: Option A
Solution
Answer: Option A
Solution:
According to capital asset pricing model assumptions, variances, expected returns and covariance of all assets are identical. The Capital Asset Pricing Model ( CAPM) describes the relationship between systematic risk and expected return for assets, particularly stocks.