Question: What are the equilibrium conditions for CAPM? Whose risk preferences determine the optimal mix of the market portfolio and the risk- free asset? Whose risk

What are the equilibrium conditions for CAPM?

Whose risk preferences determine the optimal mix of the market portfolio and the risk- free asset?

Whose risk preferences determine the market price of risk?

How will market prices and the market price of risk change if in equilibrium investors risk preferences change (either become more or less risk averse)?

What type of risk will determine the risk premium on risky assets (i.e. what kind of risk will investors be compensated for and how)?

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