Assumptions of CAPM

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CIMA Financial Planning Mindmap am Assumptions of CAPM, erstellt von Katerina Kritikos am 08/05/2022.
Katerina Kritikos
Mindmap von Katerina Kritikos, aktualisiert more than 1 year ago
Katerina Kritikos
Erstellt von Katerina Kritikos vor etwa 2 Jahre
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Zusammenfassung der Ressource

Assumptions of CAPM
  1. Investors are rational and risk averse.
    1. Investors have identical holding period.
      1. Market comprises many buyers and sellers and no one individual can affect the market price.
        1. There are no taxes, no transaction costs and no limits on short selling.
          1. Information is free and simultaneously available to all investors.
            1. All investors can borrow and lend unlimited amounts at risk free rate.
              1. Quantity of risky securities in the market is fixed and ignores liquidity.
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