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n capital markets theory, several behavioral assumptions are made. Which of the following is NOT a standard assumption? A. Portfolio risk is reduced by combining

n capital markets theory, several behavioral assumptions are made. Which of the following is NOT a standard assumption?

  • A. Portfolio risk is reduced by combining assets with low correlations.
  • B. Investors make decisions based on two parameters: risk and return.
  • C. The theoretical investment horizon is a single (undefined) time period.
  • D. Some investors are smarter than others: they have more knowledge

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