In regard to the capital asset pricing model (CAPM), which of the following assumptions (or implications) of the CAPM is a genuine success such that it is both true in practice and useful to us?
AInformation is costless and available to all investors: technology has reduced information friction to roughly zero
BRisk is factor exposure: The risk of an individual asset is measured in terms of the factor exposure of that asse
CInvestors have mean-variance utility: asset owners care only about means (which they like) and variances (which they dislike
DInvestors have homogeneous expectations: investors have identical expectations with respect to the necessary inputs into the portfolio decision
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