Which of the following is correct regarding the CAPM?

a. The CAPM implies that the return of an investor equals the market premium magnified by the portfolios beta plus the risk-free rate of return.

b. The CAPM assumes investors are not rational and have certain behavioral biases.

c. CAPM believes that a portion of total risk remains even after diversification.

d. The CAPM assumes investors have modest transaction costs (including taxes).