1) There are a large number of investors, and the wealth of each investor is insignificant compared with the sum of the wealth of all investors. Investors are the recipients of prices, and the trading behavior of individual investors will not affect the price of securities.

(2) All investors plan their investment behavior during the same period of securities holding. This kind of behavior is short-sighted, because it ignores the influence of any event at the end of the holding period, and short-sighted behavior is usually not the best behavior.

(3) Investors' investment scope is limited to assets traded in the open financial market. This assumption does not include investments in non-trading assets. Moreover, the number of assets is fixed. At the same time, all assets can be traded and completely divided.

(4) With or without risky assets, investors can borrow or lend funds at a risk-free interest rate, and the amount is not limited.

(5) There is no imperfect market, that is, investors do not have to pay taxes, there are no securities transaction fees including commissions and service fees, and there are no laws or restrictions restricting short selling.

(6) Investors are rational and risk-averse. They pursue the minimization of standard deviation of portfolio, that is, the minimization of risk. They expect the utility of wealth to be maximized.

(7) All investors have the same view on the securities and economic situation. Regardless of the price of securities, the investment order of all investors is the same.

(8) The capital market is frictionless, there is no information cost, and all investors can obtain information at the same time.