If Investors Can Freely Trade Assets in fiNancial Markets, Then

Multiple Choice

If investors can freely trade assets in financial markets, then the impact of trading activity on expected returns insures that ________________________.

A) All assets will have the same degree of systematic risk.
B) Each firm's reward to risk ratio will be based on a different risk-free rate of return.
C) Systematic risk can be diversified away.
D) Assets will have the same reward to risk ratio.
E) All assets will have the same risk premium.