Which of the following statements is incorrect?
A) CAPM was developed by William Sharpe and John Lintner.
B) An assumption of CAPM is that capital markets are in equilibrium.
C) CAPM includes many assumptions, all of which must be strictly adhered to for the main implications of CAPM to hold true.
D) CAPM is a pricing model that describes the expected return as the sum of the risk-free rate of interest and a premium for bearing market risk.

Question

Quizplus · Accepted Answer

CAPM's main implications can still hold even if some of its assumptions are relaxed or not strictly adhered to.

Which of the Following Statements Is Incorrect