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

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Question:

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

A.

They plan for one identical holding period.

B.

They are price-takers who can’t affect market prices through their trades.

C.

They are mean-variance optimizers.

D.

They have the same economic view of the world.

Answer» a. They plan for one identical holding period.

Note: The above multiple-choice question is for all general and Competitive Exams in India.