In capital asset pricing model, assumptions must be followed including________?
Correct answer: D. All of above
- A. No taxes
- B. No transaction costs
- C. Fixed quantities of assets
- D. All of above
Explanation
The standard CAPM assumptions include no taxes, no transaction costs and fixed quantities of assets, along with other ideal-market conditions. Therefore all three listed assumptions are included.
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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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