om one model to the other
Linear Algebra: A Modern Introduction
4th Edition
ISBN:9781285463247
Author:David Poole
Publisher:David Poole
Chapter3: Matrices
Section3.7: Applications
Problem 9EQ
Related questions
Question
One can use the equations of the Markowitz model to derive the CAPM equation. At this
point, one would be wrong to conclude that this is the CAPM model. What additional argument
is necessary to make the transition from one model to the other?
a. All other options are necessary.
b. There is a single investor who holds the mean-variance efficient portfolio.
c. There is at least one investor who holds the market portfolio.
d. Investors know the returns and standard deviations of all securities in the economy.
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