To choose different portfolios, the CAPM assumes investors have different

Question

Quizplus · Accepted Answer

The CAPM assumes investors have different indifference curves, indicating that they have different preferences for risk and return. This is a key component of the model, as it allows for the existence of multiple optimal portfolios based on individual investor preferences. Beta forecasts, tangent points on the efficient set of portfolios, and tax rates are not explicitly considered in the CAPM, although they may play a role in portfolio selection for individual investors.

To Choose Different Portfolios, the CAPM Assumes Investors Have Different