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Explain the difference in assumptions underlying portfolio theory and the CAPM

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Explain the difference in assumptions underlying portfolio theory and the CAPM
Answered Same Day Dec 20, 2021

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David answered on Dec 20 2021
122 Votes
Explain the difference in assumptions underlying portfolio theory and the CAPM One Page
Portfolio management deals with risk-return implications of holding risky securities and the construction of
the portfolio opportunity set, but CAPM specifies that investor could bo
ow and lend at the risk-free rate of
interest and in such situation there will be less chances of portfolio opportunity set will be shaped.
Basis of Difference Assumption Underlying
Capital Assets Pricing Model
(CAPM)
Assumptions Underlying Portfolio
Theory
Approach CAPM provides a framework
for...
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