Why does the CAPM imply that investors should trade very rarely?
A. Investors should trade every period, but because of transaction costs they will trade less often than that.
B. Investors should trade very rarely because the market portfolio changes very rarely. (The market portfolio is a value-weighted portfolio and thus requires no additional trading when prices change to maintain the value weights)
C. The CAPM is about pricing, it says nothing about trading
D. Investors have to trade every period because they hold the market and the market changes every period.