egular Time Saved Help Save & E CAPM Theory - Midterm Which of the following is true? Multiple Choice The CAPM assumes borrowing and lending at the same risk-free rate, but in reality Mimitations on borrowing require risk tolerant investors to hold less-leveraged positions in the market than they would like, leading them to demand more high-beta assets, and thereby driving down returns of high-beta assets. According to the CAPM, some assets, such as labor income, are non-tradeable. Therefore, stocks of firms with high costs of wages provide natural hedging instruments to individuals who derive most of their income from labor, leading those Individuals to push up prices of and thereby increase returns to those assets. Licht immer im Cine the renew