1. Markets for securities are perfectly competitive and equally profitable to all investors.
1.A. No investor is sufficiently wealthy that his or her actions alone can affect market prices.
1.B. All information relevant to security analysis is publicly available at no cost.
1.C. All securities are publicly owned and traded, and investors may trade all of them. Thus, all risky assets are
in the investment universe.
1.D. There are no taxes on investment returns. Thus, all investors realize identical returns from securities.
1.E. Investors confront no transaction costs that inhibit their trading.
1.F. Lending and borrowing at a common risk-free rate are unlimited.
2. Investors are alike in every way except for initial wealth and risk aversion; hence, they all choose investment
portfolios in the same manner.
2.A. Investors plan for the same (single-period) horizon.