Which of the Following Statements Is FALSE

question 50

Multiple Choice

Which of the following statements is FALSE?

• A)Since the publication of their original paper,Modigliani and Miller's ideas have greatly influenced finance research and practice.
• B)Proposition I was one of the first arguments to show that the Law of One Price could have strong implications for security prices and firm values in a competitive market;it marks the beginning of the modern theory of corporate finance.
• C)The conservation of value principle applies only to questions of debt versus equity or capital structure.
• D)The conservation of value principle for financial markets states that with perfect capital markets,financial transactions neither add nor destroy value,but instead represent a repackaging of risk (and therefore return).

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Definitions:

Cultural Accumulation

The process by which a culture gathers and collects knowledge, skills, customs, beliefs, and artifacts over time.

Technology Level

The overall measure of scientific and technological advancement in a society, including the availability and use of technical knowledge and tools.

Social Structures

are the complex networks of relationships, hierarchies, and institutions that shape societies and organize individual interactions.

Untrained Observer

An individual making observations without formal training or methodologies, which can lead to subjective or inaccurate conclusions.