Which of the Following Statements Is FALSE

question 34

Multiple Choice

Which of the following statements is FALSE?

• A)Nonzero alphas may merely indicate that the wrong market proxy is being used;they do not necessarily indicate forgone positive NPV investment opportunities.
• B)The true market portfolio contains much more than just stocks,it includes bonds,real estate,art,precious metals,and any other investment vehicles available.
• C)If the true market portfolio is efficient,but the proxy portfolio is not highly correlated with the true market portfolio,then the true market portfolio will not be efficient and stocks will have nonzero alphas.
• D)Much of the investment wealth cannot be included in the proxy for the market portfolio since it does not trade in competitive markets.

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Definitions:

Immune Response

The body's defense mechanism against pathogens, involving recognition and destruction of harmful substances or organisms.

Dense Connective Tissue

A type of connective tissue that is rich in collagen fibers, providing strength and elasticity.

Lymph Nodes

Lymph nodes are small, bean-shaped structures that are part of the lymphatic system; they filter substances that travel through the lymph fluid, and contain immune cells that help the body to fight infection and disease.

Capsule

A structure, often a part of anatomy or bacterial cells, that encases or envelops an organ, joint, or bacterial cell, providing protection or structural integrity.