Investors can buy and sell all securities at competitive market prices (without incurring taxes or transactions costs) and can borrow and lend at the risk-free interest rate
Investors hold only efficient portfolios of traded securities - portfolios that yield the maximum expected return for a given level of volatility
Investors have homogeneous expectations regarding the volatilities, correlations, and expected returns of securities
Homogeneous Expectations … All investors have the same estimates concerning future investments and returns