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A fundamental assumption of CAPM is that investors: dislike risk and need to be compensated by higher return for bearing risk. like risk and are
A fundamental assumption of CAPM is that investors:
dislike risk and need to be compensated by higher return for bearing risk.
like risk and are willing to accept lower returns for bearing risk.
are indifferent to risk and therefore do not consider the beta of a stock when they price it.
may or may not dislike risk, but do care about firm-specific risk.
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