If investors do not know their investment horizons for certain,
A) the CAPM is no longer valid.
B) the CAPM underlying assumptions are not violated.
C) the implications of the CAPM are not violated as long as investors' liquidity needs are not priced.
D) the implications of the CAPM are no longer useful.

Question

Quizplus · Accepted Answer

The CAPM assumes investors have a single-period investment horizon, but if liquidity needs are not priced, the model's implications can still hold.

If Investors Do Not Know Their Investment Horizons for Certain