In the capital asset pricing model, the general risk preferences of investors in the market place are reflected by

a.The difference between the security market line and the risk-free rate of interest at any level of systematic risk.

b.The level of the security market line.

Which one of the following is not an assumption of the capital asset pricing model (CAPM)?

a.The capital market is perfectly competitive.

b.Investors hold a variety of expectations about the probability distributions of future returns on all assets

c.The only relevant risk for security valuation is non-diversifiable risk (or systematic risk).

d.All investors are rational and risk averse

c.The slope of the security market line.

d.The risk-free rate of interest.