Discuss whether the following statement is true or false:
Under the assumption of a CAPM with no riskless lending or borrowing,every investor holds the same portfolio of risky assets.

Question

Quizplus · Accepted Answer

In a situation where there is no riskless lending or borrowing,and all investors have homogeneous expectations,they must all face the same efficient frontier.In equilibrium,if securities or portfolios happened to lie on a straight line in expected return Beta space,all combinations of securities or portfolios would lie on the same line.Hence,all investors will hold the same portfolio of risky assets.

Discuss Whether the Following Statement Is True or False