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The Capital Asset Pricing Model theory is based on what important assumption about diversification? a. Market risk can be reduced through diversification b. Diversification increases

The Capital Asset Pricing Model theory is based on what important assumption about diversification?

a. Market risk can be reduced through diversification

b. Diversification increases the required rate of return

c. Diversification reduces the real risk free rate

d. Rational investors will hold diversified portfolios

e. Diversification reduces the cost of debt

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