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The Perfect Market Assumption That There Is "No Difference in Opinion

Question 8

Multiple Choice

The perfect market assumption that there is "no difference in opinion" among investors means that


A) everyone has the same information and is in perfect agreement regarding what return should be required for each given level of risk.
B) no single entity has any market power.
C) everyone faces the same tax rate and transaction costs, so there is perfect agreement regarding what an after-tax, after-transaction cost return should be for a given level of
Risk.
D) the risk and return of all investments is known with certainty.

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