[amp_mcq option1=”tax free pricing model” option2=”cost free pricing model” option3=”capital asset pricing model” option4=”stock pricing model” correct=”option3″]<\/p>\n
The correct answer is: C. capital asset pricing model<\/strong><\/p>\n A capital asset pricing model (CAPM) is a model that calculates the expected return of a security based on its beta and the expected return of the market portfolio. The CAPM assumes that all assets are perfectly divisible and liquid. This means that investors can buy and sell any amount of an asset at any time without affecting the price.<\/p>\n A tax free pricing model is a model that calculates the price of an asset based on its expected cash flows, discounted at a tax-free rate. This model assumes that investors do not pay taxes on the income from the asset.<\/p>\n A cost free pricing model is a model that calculates the price of an asset based on its expected cash flows, discounted at a cost-free rate. This model assumes that investors do not pay any costs to buy or sell the asset.<\/p>\n A stock pricing model is a model that calculates the price of a stock based on its expected cash flows, discounted at a risk-free rate. This model assumes that stocks are perfectly divisible and liquid.<\/p>\n In conclusion, the CAPM is the only model that assumes that all assets are perfectly divisible and liquid.<\/p>\n","protected":false},"excerpt":{"rendered":" [amp_mcq option1=”tax free pricing model” option2=”cost free pricing model” option3=”capital asset pricing model” option4=”stock pricing model” correct=”option3″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[945],"tags":[],"class_list":["post-46955","post","type-post","status-publish","format-standard","hentry","category-financial-management","no-featured-image-padding"],"yoast_head":"\n