Write an assessment to address the following problems
The CAPM takes this concept of diversification further by introducing the idea of “market portfolio” which consists of all possible investment opportunities available within a given market. The basic premise behind this model is that investors can maximize their return for a given level of risk simply by putting together an optimal portfolio from these various options available. As such, it effectively makes use of the diversification principle as its foundation by allowing investors to select those assets with expected returns higher than what would normally be offered from investing in just one stock or bond without having to face unduly high levels of risk associated with it.