One of the assumptions of the CAPM is that investors exhibit myopic behavior. What does this mean?

Related MCQs

• The CAPM is founded on the following two assumptions (1) in the equilibrium every mean variance investor holds the same market portfolio and (2) the only risk the investor faces is the beta
• If the current market price is considered as a basis of CAPM, then what would happen if Actual Market Price < CAPM,
• Which of the following assumptions is common between the pricing models of CAPM and APT?
• Which of the following statements is/are not correct with respect to the ‘Constant Mix Strategies’ of asset allocation? I. Investors adopting these strategies tend to maintain an exposure to stocks that are in constant proportion of their wealth. II. The risk-tolerance level of the investors varies proportionately with the level of theirwealth. III. Reversals in stock markets oppose constant mix strategies over the buy and hold IV. strategies.
• According to the Capital Asset Pricing Model (CAPM), over priced securities
• According to the Capital Asset Pricing Model (CAPM), the expected return of a well- diversified portfolio with abeta of 1.0 and positive ex-ante alpha (a) is
• If the risk free rate of return (Rf) is 7%, expected return on the market [E(Rm)] is 15%, and the return on stock X is 16%, the beta for the stock X using CAPM is
• Graphical presentation of CAPM is known as
• If the market is _______, the period after a favorable (unfavorable) event would not generate returns beyond (less than) what is suggested by an equilibrium model such as CAPM
• What should be the investment decision When CAPM < Expected Return ?