In theory, the CAPM requires that the market portfolio consist of only common stocks.

Name: In theory, the CAPM requires that the market portfolio consist of only common stocks.
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The Capital Asset Pricing Model (CAPM) posits that the market portfolio should include all assets in the market, including stocks, bonds, real estate, and even personal income, as long as they are marketable and have value, not just common stocks.

In Theory, the CAPM Requires That the Market Portfolio Consist