December 2014

1:

Consider the following statements regarding the assumptions of Capital Asset Pricing Model :

I. All investors have the same expectations about expected returns and risks of securities.

II. Lending and borrowing rates of all investors are different.

III. Investors expect highest returns for highest level of risk.

IV. Share prices reflect all available information.

V. Individual investors are not able to affect the prices of securities.

Select the correct code :

A.

I and II only

B.

I, II and III only

C.

I, III and V only

D.

I, IV and V only

 

Answer : C

Explanation :

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Option: A

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