Q733
All assets are perfectly divisible and liquid in
A.
tax free pricing model
B.
cost free pricing model
C.
capital asset pricing model
AnswerD.
stock pricing model
Answer: Option C
Solution
Answer: Option C
Solution:
All assets are perfectly divisible and liquid in capital asset pricing model. The Capital Asset Pricing Model (CAPM) describes the relationship between systematic risk and expected return for assets, particularly stocks. CAPM is widely used throughout finance for pricing risky securities and generating expected returns for assets given the risk of those assets and cost of capital.