Which of the following statements is FALSE?
A)A combination of portfolios on the efficient frontier of risky investments is also on the efficient frontier of risky investments.
B)The conclusion of the CAPM that investors should hold the market portfolio combined with the risk-free investment depends on the quality of an investor's information.
C)The SML holds with some rate r* between rs and rb in place of rf,where r* depends on the proportion of savers and borrowers in the economy.
D)In reality,investors have different information and spend varying amounts of effort on research for assorted stocks.

Question

Quizplus · Accepted Answer

The conclusion of the CAPM that investors should hold the market portfolio combined with the risk-free investment does not depend on the quality of an investor's information. It assumes that all investors have access to the same information and have the same expectations about the market.

Which of the Following Statements Is FALSE