Which of the Following Statements Is FALSE

question 65

Multiple Choice

Which of the following statements is FALSE?

• A)If the CAPM correctly computes the risk premium,investors would stop investing only when they expected the alpha of an investment strategy to be negative.
• B)If the CAPM correctly computes the risk premium,an investment opportunity with a positive alpha is a positive NPV investment opportunity.
• C)If the CAPM correctly computes the risk premium,investors should flock to invest in positive alpha stocks.
• D)Anyone can implement a momentum trading strategy and therefore generate a positive investment opportunity.

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Definitions:

Trade Deficit

A situation where a country's imports exceed its exports, leading to a negative balance of trade.

International Basis

Engaging in business or transactions that involve entities in multiple countries or global considerations.

Current Account Deficit

A measurement of a country's trade where the value of goods and services it imports exceeds the value of goods and services it exports.

Capital Account

A national account that shows the changes in asset ownership for a country, including foreign investments.